As a network that allows arbitrary data—not just tokens—to be transferred across connected blockchains, one could say that interoperability is baked into Polkadot. This makes it a true multichain application environment where things like cross-chain registries and computation are possible. This functionality hinges on a few core components. Let’s break it down.
Polkadot bridges: foundation
The relay chain is the foundational chain of Polkadot, the central nervous system. With a deliberately limited set of functionalities, the relay chain abstains from features like smart contracts, focusing instead on essential tasks such as governance mechanisms and facilitating NPoS. All parachains and parathreads get interconnected through this pivotal hub.
Parachains are specialized data structures within Polkadot that operate in parallel to the relay chain, enabling the scalability of the protocol. While it often takes the form of a blockchain, it isn't strictly required to be one. Parachains are globally coherent and validated by the relay chain's validators, benefiting from the network's shared security.
Parathreads allow blockchains to temporarily participate in Polkadot's security on a block-by-block basis without a dedicated parachain slot. This is achieved by economically sharing the slot among several parathreads. It's an economical way for chains that might not need or afford a full-time slot to still benefit from Polkadot's security.
Transition to Polkadot 2.0
Initially, the right to become a parachain was obtained through auctions, where projects would bid, and the highest bidders would get to lease a slot for a defined period.
In Polkadot 2.0, the parachain auctions will be replaced with a core-lease or core-rental model. This model allows blockchains to connect on-demand through the relay chain, providing a more flexible approach to utilizing the Polkadot ecosystem.
This transition to 2.0 and the introduction of the core-lease concept signify a shift towards a more adaptable and scalable ecosystem, where specialized blockchains can connect as per their requirements without the need to engage in competitive auctions.
In-house interoperability: XCM
In terms of interoperability, XCM, or Cross-Consensus Message Format, is Polkadot's answer to the question: how can different blockchains, each with its own rules, communicate?
XCM is a universal messaging format explicitly designed for Polkadot that serves as a common communication standard. How does it work?
Imagine the Polkadot ecosystem as the world, and parachains and parathreads are cities scattered across the globe. Communication between these networks (cities) can be likened to international flights, with the relay chain as the central control tower.
- Sending a message: When a parachain wants to send a message (like transferring an asset) to another parachain, it doesn't send it directly. Instead, it sends the message to the relay chain using XCM format.
- Translation & routing: The relay chain, understanding the XCM format, acts as a translator and router. It decodes the message and determines its destination.
- Reaching the destination: Once the relay chain knows where the message should go, it forwards it to the destination parachain. The receiving parachain, familiar with XCM, understands the message and acts accordingly.
- Feedback loop: After processing the message, the receiving parachain can send back a response, again using XCM, completing the communication loop.
XCM in action
XCM is versatile, allowing various operations like opening a smart contract on another parachain or voting on a governance proposal on a different chain.
It’s also secure and efficient. All messages sent via XCM pass through the relay chain, which provides the security consensus, ensuring that the messages are not only delivered quickly but are also tamper-proof.
A practical example of XCM would be a user on Parachain A wanting to use a dApp available only on Parachain B. By using XCM, they can seamlessly transfer their assets to Parachain B, have their fun, and then transfer any assets or data back to Parachain A, all while ensuring security and without leaving the Polkadot ecosystem.
A (much-anticipated) update to XCM has been in the works for a while and is released under V3. This new version offers:
- Enhanced instructions: XCM v3 introduces new instructions like UnpaidExecution, LockAsset, UnlockAsset, Burn Asset, and NoteUnlockable, providing more functionality and versatility.
- Programmability: It allows messages to be programmed to execute more complex operations, such as branching and safe dispatches, to develop sophisticated cross-chain applications.
- Multichain decomposition: It can decompose the functions of the relay chain into different parallel chains, improving scalability and performance.
- Bridging: It can build bridges between chains, including those outside the Polkadot ecosystem, facilitating the movement of assets and data between chains.
- NFT/asset support: It supports transferring and exchanging NFTs and other assets between different chains.
- Conditional execution: Messages can be programmed to execute if certain conditions get met, creating secure cross-chain applications.
- Context tracking: It keeps track of the context of a message as it travels between different chains, aiding the development of cross-chain applications.
Practical applications of XCM v3
The update to XCM has wide-ranging implications. In terms of DeFi, developers now have more of an ability to create applications that allow users to interact with assets and protocols across multiple chains. There’s also significant potential for cross-chain gaming because the new XCM enables the development of applications where players can interact with assets/characters regardless of chain.
There’s also cross-chain identity to consider. In this sense, v3 can be used to build systems that allow users to share their data and reputation across multiple chains, increasing access to a broader range of experiences. As the Polkadot universe expands, XCM will evolve and play a key role in weaving together the fabric of this interconnected world.
In this sense, Polkadot (and Kusama) have experienced notable growth in recent years.
This is great. However, there’s one problem. Not all blockchains are parachains, and in order to communicate outside of the ecosystem, we need a secure gateway. With the rise of parachains, we need both parachains and dedicated interoperability protocols because the need for liquidity is clear.
Enter blockchain bridges—infrastructure that allows two economically sovereign and technologically diverse chains to communicate with each other. In this case, what we’re talking about is connectivity protocols that allow inter-ecosystem communication. e.g. polkadot and evm L1s, rollups, solana, cosmos, etc.
🌉 For a primer on how blockchain bridges work, here or here are good places to start.
There are a number of teams building solutions that generally fit into the description outlined above. These include:
Snowbridge - A trustless, general-purpose Polkadot-Ethereum bridge that’s been under development for some time. Recently, the team announced the completion of an audit and plans to deploy on Kusama in the coming months.
HyperBridge - recently introduced by Polytope labs, Hyperbridge is an interoperability coprocessor capable of scaling cryptographically secure, consensus & state-proof based interoperability to "all" blockchains.
Darwinia Network - A programmable cross-chain messaging infrastructure for decentralized applications whose light client-based cross-chain messaging protocol (LCMP) supports arbitrary message passing between Substrate and EVM chains. The team recently unveiled an omni-chain messaging protocol that can be used to build decentralized applications.
Interlay - A decentralized network dedicated to connecting cryptocurrencies like Bitcoin with platforms like Polkadot, Interlay is currently operating in beta testnet mode. Users can utilize the bridge to create 1:1 Bitcoin-backed assets on the Polkadot ecosystem.
Composable Finance - trustless.zone (built by composable), a bridge that connects Polkadot and Cosmos through an implementation of the trustless IBC. The bridge has recently become the canonical bridge, serving as the main route to Polkadot and Kusama for Osmosis.
Carrier - Built by Automata Network and powered by Wormhole, Carrier offers a range of solutions that can connect quite a few blockchains, including Polkadot, Ethereum, and more. HydraDX is a notable project that uses Carrier. While this seems to be a promising solution, there are some question marks about what’s happening underneath the hood.
Then there’s Sygma, an interoperability layer for native cross-chain communication. Sygma is a community-driven protocol that allows native composability of data, tokens, and general message passing between different chains.
Our current focus is Ethereum to layer 2s and EVM to substrate parachains, where we can leverage the power of Polkadot, Dot, and Kusama’s relay chain, as well as individual parachains that use DeFi applications and the power of XCM.
Sygma is designed to be a generalized interoperability protocol, i.e., supporting fungible, non-fungible, and GMP for native cross-consensus connectivity. For now, this is EVM and Substrate, but IBC coming soon.
In this context, “native” means we can work on Substrate without an EVM layer (that introduces more complexity, such as XC-20 Assets).
In addition, Sygma offers:
- Tailored security options via MPC + an upcoming ZK light client protocol called Spectre
- Seamless integration of intra-ecosystem protocols such as XCM
All of this will be able to utilize XCM and bounce between parachains with our 'multi-location asset' implementation. Notably, one of Sygma’s first big integrations is Phala Network’s Subbridge. This is the integration of their front end with the Sygma back end for token bridging (PHA) into other parachains.
With SubBrigde, a user can go from Ethereum → Phala → Astar in one fell swoop.
This showcases the potential of native (non-synthetic) interop between Ethereum and Substrate, plus XCM, to bridge into another parachain.
There’s a lot going on for Polkadot in terms of interoperability. This is true both internally (between parachains) and externally with the development of Sygma and all the projects mentioned above. We’ll be further exploring these intricacies in future posts.
Looking to connect your Substrate-based application to an EVM chain?
Sygma connects developers with the chains they want, from Polkadot to Cosmos to Polygon and beyond. Craft seamless cross-chain experiences—check out our documentation or GitHub to get started.
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