Interoperability In Web3 – Why It Matters?

Blockchain today is limited by the inability of protocols to communicate with each other. Interoperability seeks to overcome this issue. This extends beyond layer 1 protocols like Ethereum and Polkadot and includes applications built on those networks too.

By Alex Hickey

26 Jul 2022


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Blockchain today is limited by the inability of protocols to communicate with each other. Interoperability seeks to overcome this issue. This extends beyond layer 1 protocols like Ethereum and Polkadot and includes applications built on those networks too. For the expansion of Web2 into Web3 to proceed efficiently, interoperability is a necessity.

What are Key Blockchain Challenges?

From its conception, blockchain has faced various challenges which have held it back from being adopted by the masses.

  1. As with any new technology, many brushed blockchain and crypto off as a bubble or a scam. This was a major hurdle that required the technology to go through many years of building stability and faith in the software. With institutional investment becoming the norm, it now seems that this sentiment has largely been dismissed.
  2. Scalability was another of the initial impediments to blockchain adoption. We have come to rely on fast and reliable systems of communication. Blockchain technology slowly grew from a seven transactions per second standard to tens of thousands in some chains today. Without access to fast and efficient processes, there is little hope of anyone considering adopting Web3.
  3. Finally, different ecosystems offer a variety of use cases and platforms for users’ needs. This is a great thing as it provides all sorts of solutions to whomever needs them. The problem here is that communication, even between applications on the same chain, cannot connect in a straightforward way with each other.

This is the case of Web3 interoperability, the capacity for applications across different chains to interact with each other as well as applications on other chains.

The Blockchain Interoperability Problem

Early blockchain systems like Ethereum and Cardano set the stage for just how vast the potential of blockchain could be. Providing a blank canvas for technological advancement, development, and research produced many breakthrough systems which we have come to rely on today. Decentralized Finance and on-chain data storage, to name just a few.

However, one of the greatest crypto challenges, both then and now, is the inability to interoperate. If you are a daily user of blockchain technology, you would know how long it takes to bridge coins from one application to another, more so if you are going from one ecosystem to another.

As an analogy, imagine only having the ability to work using Google suite and manually connect to other websites like Netflix or Amazon separately. Now that we have become accustomed to the flexibility of Web2, having a costly and time consuming version of it would certainly be a step back.

Why is Web3 Interoperability so Important?

The current framework of Web2 technology relies on centralized databases that are vulnerable to modern malicious actors. Single servers are becoming easier to hack as cyber criminals come to understand technology that is reaching obsolescence. By decentralizing the web and working towards the integration of Web3 into the internet, we can build up security and trust in our use of the web.

Web3 interoperability enables users to access the plethora of available applications across different chains without ever leaving the decentralized space. This is essential to giving the freedom of mobility to users while maintaining the security that is expected from blockchain technology.

Whether in business or just for fun, interoperability brings different protocols together for a greater connection among all users of the technology. This is essential to the adoption of blockchain and Web3 as a whole.

Web3 Interoperability and Blockchain Mass Adoption

As mentioned, blockchain adoption is at the forefront of every development team’s mind. Introducing new people to the world of blockchain has come down to making it simpler to use, faster, and adding more use cases that apply to different consumers. The key benefits of blockchain technology are clear and they can be applied to Web3 too.

Lisk’s contribution to crypto adoption is the use of JavaScript in the ecosystem’s SDK. This makes blockchain and Web3 application building that much easier and gives users and programmers a straightforward point of entry into the blockchain world.

Interoperability would undoubtedly impact blockchain adoption in a substantial way. The increased functionality that comes with interoperability means that Web3 use is seamless, smooth, and more reflective of the internet we use today. This is an essential part of the adoption of blockchain technology as a standard within web browsing.

Web3 interoperability is also said to increase scalability. This is due to the fact that many projects building interoperable protocols are putting a focus on this aspect of the technology. Validation of data exchange is what dictates this, and taking pressure off of the mainchain is essential to keeping the whole ecosystem fast and efficient.

Finally, interoperability will allow users to go from one platform or application to another without issue. You can trade NFTs across networks, transact with users in different chains, and follow the progress of your portfolio as a whole from one single point and with your preferred wallet. This sense of simplicity in use will drive the next great push for crypto adoption and greater blockchain use as a whole.

Interoperability will make blockchain more accessible and attractive to new users because it expands on all of the ideas that blockchain has pioneered so far. It gives greater access to users and keeps the space decentralized and secure. Web3 interoperability allows users a holistic and easy-to-use space in which user activity can be uninhibited. This will make Web3 open to all, but of course there are more than one solution being developed today.

Web3 Interoperability Solutions

Since it was first mentioned in 2014, there have been a variety of attempts to reach interoperability. First and foremost, interoperability inside an ecosystem addresses the needs of that community and gives a greater incentive to work within different applications. Interoperability can also bring great advantages like increased scalability and functionality in some cases.

  • Looking at Polkadot, we can understand some of the difficulties that come with interoperability. Parachain technology uses shards in the network with shared validators to relay information going around the ecosystem. Polkadot only allows for a limited number of parachains as the relay chain increases with every parachain.
  • Cardano uses sidechain technology which works by having signed certificates sent from one chain to another. As long as the data on the chain can be confirmed by the receiving chain the information in the certificate can be validated and added to the chain. This use of sidechain technology requires both chains to use Proof-of-Stake (including DPoS and PoA) as their consensus algorithm.

Both of these examples show that common-use interoperability is still a ways off. For true interoperability, chains should not substitute security or speed for interoperation, and it should be open to all kinds of chains.

Lisk uses a form of sidechain technology too. The research and development into this approach have made a lot of progress. Sidechains collect Cross-Chain Messages into a Cross-Chain Update over a period of blocks being added to the chain. This update is then sent to the receiving chain to be validated and added to it.

Sidechain technology can increase scalability as they each work on using their own validators. The mainchain is left untouched when transactions are going around the ecosystem putting less pressure on it. It is also true that this makes the whole network more functional. Communication between applications means that users can get more done in a shorter period of time and over more protocols and applications.

The Future of the Web3 Interoperability

As time has passed, Web3 has developed and grown alongside the needs of the populous. Decentralization and increased security are two of these principles that are becoming more and more of a factor that people insist upon. Ideas like peer-to-peer interactions and an array of platforms to work on while on-chain.

The major inhibitor of the Web3 revolution is the ability to interoperate across a multitude of programs. The future of this technology will rely on this interoperability so that we can have a more holistic approach to blockchain, much in the same way that we do with the internet today.

In the coming years interoperability will take center stage. Solutions will be developed and expanded upon in the same way that blockchain has since its conception over a decade ago. Web3 interoperability is an essential part of any solution as it is the next great revolution in the blockchain story. If you are interested to learn more about interoperability, there are plenty of resources available for you to explore.