The Fight for Cross-Chain Dominance: Is it Going to Be David vs Goliath?
Tech giants such as Microsoft (NASDAQ: MSFT) and IBM (NYSE: IBM) have been making substantial investments into the blockchain and decentralized finance (DeFi) space. These Big Tech firms realize that the future of finance and business holds key opportunities that they can’t afford to leave behind because the global economy will be established around them.
Meanwhile, small yet agile blockchain or distributed ledger tech (DLT)-related initiatives are also identifying and addressing key problems in the nascent DeFi space. For example, there are many crypto projects that are focused on providing scaling solutions so that large blockchains like Ethereum (ETH) are able to handle a large number of transactions in a cost-effective manner. In addition to creating these solutions, blockchain interoperability is also a key focus area for many crypto-focused platforms.
The main goal of blockchain interoperability is to form connections with several different DLT networks so that they’re able to exchange data and assets in a seamless manner. Most crypto industry analysts agree that the future of the digital assets and DLT sector will involve more than just one large blockchain. That’s why it is imperative for ecosystem participants to develop solutions that allow tokens from multiple blockchains to be transferred across different networks in an efficient manner.
Microsoft Awarded Patent for Cross-Chain Token Service
Microsoft was recently awarded a blockchain patent for implementing a cross-chain token service. As widely reported in August 2021, Microsoft acquired a US patent for software applications that it said would assist users with creating various blockchain apps by making it easier to issue cryptocurrency tokens for different DLT networks.
As noted in the patent application, creating and managing different digital tokens can be quite challenging and tedious, because there’s no standardization across multiple chains. Microsoft’s latest patent specifies a ledger-independent system for assisting individual users or organizations with minting their own tokens, and for being able to manage them across chains.
Establishing “Decentralized Standard” for Ensuring Cross-Chain Interoperability
In order to provide greater interoperability within the DeFi space, deBridge recently acquired a substantial amount of capital, so that they could begin working on a decentralized standard for cross-chain interoperability in the crypto space. The deBrige team notes that they plan to improve cross-chain functionality by enabling multiple blockchains with quickly and efficiently exchanging assets and data with each other.
The deBridge developers plan to implement the digital infrastructure required to enable large blockchains like Binance Smart Chain and Ethereum to communicate with each other. Although DeFi might continue to play an increasingly important role in the future digital economy, it will need proper cross-chain interoperability solutions to support sophisticated, enterprise-grade applications.
deBridge’s recent $5.5 million round was completed last month and included contributions from ParaFi. The platform’s round also acquired capital from Animoca Brands, Huobi Ventures, Lemniscap, Crypto.com Capital, MGNR, IOSG, Fundamental Labs, MarketAcross, bitScale, DFG, Chorus, SkyVision Capital, The LAO, GSR, AngelDAO, NeptuneDAO, D64, Axia8 Ventures, Mounir Benchemled, Gabby Dizon, Santiago R. Santos, among others.
With the support of these crypto industry participants, deBridge was introduced to resolve many of the issues resulting from inadequate cross-chain interoperability and the inability to carry out seamless swaps. The project’s supporters believe that the DeFi industry is in need of a comprehensive cross-chain solution.
deBridge had actually started off its project when it took part in the Chainlink Spring 2021 Hackathon event, where the team was awarded the grand prize while going up against 140 other initiatives.
An Interoperable Future Requires Cross-Chain Compatibility Solutions
Individual consumers and organizations are increasingly demanding accessible and seamless financial services. These requirements will have to be supported by modern digital infrastructure that can support interoperability between multiple chains and independent financial ecosystems.
Projects like deBridge are focused on providing cross-chain services so that it becomes a lot easier to conduct cryptocurrency trades and exchange information across multiple blockchains. At present, there are just way too many token standards that aren’t compatible with each other. This has led to fragmented systems and there’s just not enough liquidity to support an efficient DeFi ecosystem. However, if these protocols continue to enhance interoperability, then the tokenized economy should be able to achieve mass adoption.Source