Blockchain Interoperability

Blockchain interoperability allows different blockchains to seamlessly exchange data, assets, and functionality. Its main purpose is to overcome blockchain isolation by enabling different blockchains, each with their own architectures, to interact in a secure and decentralised manner, where applications and users are not limited to a single chain but can operate across multiple blockchain networks.

Interoperability standards act like a universal cross-chain ‘language’ that different blockchains can adopt. By agreeing on a common format for communication and data exchange, any participating blockchain that implements the standard can send and receive transactions, tokens, or messages with others.

A common approach to interoperability has been through bridges, which lock the transferring assets on the original chain and mint equivalent tokens on the destination chain through specialised protocols and middleware, which format, verify, and transmit data and asset transfers between chains.

One interoperability model uses a ‘light client’ approach, where each chain keeps a ‘light client’ of the other chain to verify transactions using cryptographic proofs, enabling secure transfer of arbitrary messages across chains.

Another interoperability approach is the sidechain-relay chain model, where independent blockchains (sidechains) are connected to a mainchain (relay chain) that provides security or coordination. Sidechains can have their own consensus but rely on the mainchain for finality or dispute resolution.