The Web3 market is expected to reach $81.5 billion by 2030, according to Emergen Research, but the industry still faces challenges that need to be addressed, including security and interoperability, players interviewed by Cointelegraph said.
In short, interoperability provides a link between blockchains to offer users a Web2-like experience, hide infrastructure complexities, and ensure they don’t have to figure out which solution supports the mobile app they’re using. using, as explained by PureStake CEO Derek Yu, the Moonbeam Layer 1 blockchain development team.
However, interoperability also adds more moving parts to any system, and security is one of the biggest concerns. Justin Holog, Studio Director at Immutable, explained:
“Basically, the more links in the chain, the greater the chances that one of them will fail. One such link in terms of interoperability is the need for ‘bridges’ that facilitate the transfer of assets between blockchains, and these are often attacked by hackers .”
In fact, Chainalysis estimates that as of August 2022, 13 cross-chain bridge hacks have resulted in the theft of $2 billion in cryptocurrencies. Bridge attacks account for 69% of total stolen funds this year. In one of the biggest recent cases, hackers took $612 million out of Ronin Bridge and Katana Dix by forging private keys for fake withdrawals.
Yu noted that important steps have been taken this year to ensure interoperability and security solutions in the crypto space, especially with public chain messaging systems, including those provided by Cosmos IBC, Polkadot XCM, Axelar, LayerZero, and Wormhole.
This feature solves common problems in the code area and thus opens up wider usage. For example, in the case of non-perishable tokens (NFTs), platforms that host assets from multiple chains may allow users to purchase NFTs minted on another chain without transferring anything.
In the case of DeFi, users will be able to combine the liquidity of multiple assets or chains into one chain, providing a single liquidity, explained Sergey Gorbunov, co-founder and CEO of Axelar, in an interview with Cointelegraph at Converge22. Axelar is a Proof of Stake (PoS) blockchain that was founded in 2020 and achieved unicorn status this year. In September, the company partnered with the Sui blockchain to offer cross-chain communication through public messages, allowing developers to build on one chain and call any function on another.
In the gaming sector, interoperability can also add value to gaming assets such as NFTs. In Immutable, Hulog oversees a partnership between The Sandbox and the game Guild of Guardians, which allows users to play some of the characters in both universes. By focusing on player experience and participation, the partnership ensures game compatibility that many projects are working on as the industry evolves.
Security concerns remain in the short term, but in the long term, interoperability will result in “more specialized threads that try to do less, be simpler, and should provide a more secure environment,” Yu said.