coincodex.com
Interoperability is a multisyllabic word that describes a cross-chain world in which blockchains talk to one another like friends at a bar. Only it’s not small talk these compatible networks are exchanging: it’s value in the form of messaging that’s used to lock and unlock value across various chains.
The problem with interoperability is that it’s extremely hard to get rival blockchains talking the same language – particularly when one of them has no smart contract compatibility (looking at you, Bitcoin). Various engineers and architects have grappled with this problem for years with varying degrees of success. Now, Flare’s designers claim to have struck gold with a solution that is both secure and effective at transferring value between chains – including “OG” networks like Bitcoin, Dogecoin, and XRP.
Flare Catches Light at Last
Flare has been a long time in the making. The interoperability network first came to attention in 2020, when an airdrop was announced for XRP holders.
An airdrop snapshot was conducted in late 2020 for XRP holders, who were promised FLR tokens when the network launched. That date is finally nigh, with 15% of FLR’s total supply set to be distributed to airdrop recipients on January 9 followed by further installments over 36 months.
While the XRP community will be happy to get its hands on fresh tokens in the depths of a bear market, the greater significance of this event is in what it means for interoperability.
Building a Better Blockchain Bridging Solution
The most obvious example of interoperability in action is blockchain bridges. They’re the means by which value – tokens, NFTs, smart contract messaging – passes between chains. The problem with bridges, as anyone who’s dabbled in DeFi will attest, is that they’re inherently unsafe. More than $2 billion was lost in bridge exploits in 2022, a fact that hasn’t escaped the attention of Flare CEO Hugo Philion.
As he explains,“The lack of adequate cross-chain communication has constrained the size, participation, and efficiency of the Defi market. Not only have existing designs resulted in the loss of billions of dollars of capital, but they are also hard to use, limiting participation to more sophisticated users. As a result, market size, liquidity, and returns have been constrained.”
Flare uses two protocols to tackle the challenges of blockchain interoperability: the State Connector and Time Series oracle. These grant Flare a deep insight into activity that is occurring on other chains, allowing assets to be securely unlocked on Flare’s network with confidence in the integrity of the blockchain’s current state.
While users of EVM chains such as Ethereum and Polygon might not appreciate the difference, users of generation-one blockchains, which lack smart contract support, will. For the first time, Bitcoin, Dogecoin, and XRP will be able to transcend the limitations of the chain that spawned them, ushering in a new era for interoperability.