Interoperability

November 21, 2023 - Around 2 mins mins to read

Understanding Interoperability

Interoperability, also known as cross-chain interoperability, is the ability to access and exchange information across multiple blockchains within the context of blockchain. This capability allows for the seamless trading of assets across different blockchains without relying on a centralized exchange.

The advancement of blockchain technology relies heavily on the development of interoperability as it enables users to transact across various platforms. While there are existing solutions for blockchain interoperability, there is a need for additional solutions to connect separate blockchains such as Bitcoin and Ethereum.

One popular solution for achieving interoperability is the utilization of wrapped tokens, also referred to as proxy tokens. An example of a wrapped token is Wrapped Bitcoin (WBTC). However, the use of wrapped tokens necessitates a trusted custodian to hold user funds or the implementation of a secure mint/burn protocol to ensure a consistent supply of crypto assets.

Komodo is actively working on a native blockchain interoperability solution called AtomicDEX. AtomicDEX is a decentralized exchange that is compatible with 99% of crypto assets. It achieves blockchain interoperability through the use of atomic swaps, which are secure trades of digital assets made directly between users using non-custodial wallets. This creates decentralized bridges between different blockchains and protocols. Notably, AtomicDEX supports native cross-chain trading, eliminating the need for wrapped tokens. Another project focused on interoperability is Cosmos, which utilizes its inter-blockchain communication (IBC) protocol.

Author: Kadan Stadelmann, CTO of Komodo

Kadan Stadelmann is a blockchain developer, operations security expert, and Chief Technology Officer of Komodo. Komodo is an open-source technology provider that offers comprehensive blockchain solutions for developers and businesses. The company collaborates closely with organizations that aim to launch their own custom decentralized exchanges, DeFi platforms, and independent blockchains. Komodo’s flagship technology is AtomicDEX, a mobile and web-compatible non-custodial multi-coin wallet and decentralized exchange powered by atomic swaps. Kadan is deeply committed to Komodo’s open-source vision and ideology, driven by a strong desire to contribute to a better world. Apart from his expertise in cryptography, blockchain technology, and development, Kadan has a keen interest in literature, mathematics, astrophysics, and traveling.