Expanding the Interoperability Potential of AllianceBlock Bridge with the Cross-Messaging Protocol
Ever since its release in early July, our fully decentralized interoperability solution, AllianceBlock Bridge has been developed with a specific purpose — to become the industry standard for achieving interoperability as a one-stop-shop for bridging ERC-20 tokens. With this objective in mind, we’ve continued to develop the bridge to support a number of top blockchains; Ethereum, Binance Smart Chain, Avalanche, Polygon, Energy Web, Arbitrum and Optimism. With the release of the Bridge SDK, we also begin to see first DeFi projects use our solution to achieve interoperability.
In order to allow various types of information to be bridged and open up to even more use cases, however, we decided to change the course of development and instead build a protocol that is abstract and not tied to a specific standard. Implementing the cross-messaging protocol in our Bridge will enable the connection between different networks and allow arbitrary data to be exchanged.
With the messaging protocol, we will create a base layer for different applications. This will allow us to use gateway contracts for specific functionalities (e.g. ERC-20 Bridge, ERC-721 Bridge, etc.) and will allow different parties to deploy custom contracts and use the protocol without having to set up their own infrastructure. The protocol will be governed by a set of validators and consists of the consensus logic and smart contracts on the supported chains. The consensus mechanism will continue to be based on the Hedera Consensus Service and guarantee that the messages will be transferred securely and in a trust-free manner.
To increase the adoption of the protocol and of ALBT, the bridging fees for every message will be paid in the networks’ native currency which will be swapped for ALBT in shared pools. Similarly, the validators that are responsible for securing the protocol will be paid in ALBT. We already see this adoption in action with Energy Web, a major layer one blockchain, beginning to adopt our solution and offering EWT fees that are then swapped to ALBT in a shared pool.
Upcoming Use Case: NFT Bridging
The implementation of the cross-messaging protocol into our Bridge will allow us to help many more areas of our industry to achieve interoperability. One of them is the exciting world of non-fungible tokens (NFTs). As NFTs get more popular, they start to face the interoperability problem. The NFT Bridge functionality will be built on top of the messaging protocol and will allow users to bridge non-fungible tokens to and from multiple networks and use them on the different dApps built on those networks.
The messaging protocol will be responsible for the transmission of the messages and the NFT Bridge contracts will be responsible for encoding and decoding those messages, fetching and forwarding signed transmissions to the protocol’s contracts and executing the app-specific logic. The bridge will lock the selected NFT on the source chain and create an identical wrapped version on the destination chain. When bridging back to the native chain, the NFT will be burned on the source chain and unlocked on the destination (native) chain. When bridging between two non-native chains, the NFT will be burned on the source chain and minted on the destination chain.
Why did we decide to change the direction of development?
The initial idea was to build a bridge that only developed according to the current ERC-20- focused approach. During development reviews, however, we realized that we can separate the logic related to the validation of the messages and the dApp’s smart contracts, which would allow us to easily plug in other dApps and support different standards in the future.
This means we can deliver on our objective of becoming the industry standard and help even more parts of the industry achieve seamless, trustless interoperability. Being built on top of the messaging protocol, the NFT Bridging will be fast and secure and users will pay the bridging fees in the native currencies of the relevant network. This also means that NFT Bridging is just one of the many upcoming use cases that can be explored using AllianceBlock Bridge.
How does the new approach improve the functionality of the Bridge and increase the utility of ALBT?
The current ERC-20 bridge will be migrated to the protocol after the NFT Bridge implementation. The bridging mechanism will remain the same, but users will be able to pay the fees with native currencies, so they will no longer be required to possess ALBT. However, ALBT will still have its use case — the collected fees will be swapped for ALBT and validators will be paid in ALBT. This means that we’ll be able to open up our bridge to even more projects and users, who will be benefiting from AllianceBlock Bridge and using ALBT without even knowing it. In order to continue increasing the utility of ALBT, we will also introduce a minimum ALBT amount required to be staked in order for a third party to become a validator, thus locking even more of our native token in the mechanics of the AllianceBlock Bridge.
About AllianceBlock
AllianceBlock is bridging the gap between decentralized and traditional finance by remedying issues in both spheres and linking them more closely together. They see the future of finance as an integrated system in which the best of both worlds can work together to increase capital flows and technological innovation.
They are building this future by bridging traditional finance with compliant, data-driven access to new decentralized markets, DeFi projects and ecosystem-scaling tools such as funding and interoperability. As such, they are building a next-generation financial infrastructure that aims to provide regulated financial entities worldwide with the tools they need to access the DeFi space seamlessly.
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