Although the Web3 market is projected to reach $81.5 billion by 2030, there are still some obstacles in its way, such as security and interoperability concerns, that need to be addressed.
Interoperability seeks to establish communication between various blockchains, similar to the experience users have with Web2. As CEO of PureStake and the development team for Moonbeam, Derek Yoo explained that interoperability essentially hides infrastructure complexity from users so they don’t need to know what solution powers the mobile app they’re using.
However, with more moving parts comes greater challenges- such as security. In fact, Chainalysis estimated that $2 billion in cryptocurrency will be stolen by bridge attacks alone by August 2022. This year, 69% of all hacked funds were taken via bridge attacks. One of the most notable cases being when hackers drained $612 million from both Ronin and Katana Dex by forging withdrawals with fake private keys.
Yoo stated that many large steps have been taken this year to bring interoperability and security solutions to the crypto space, with cross-chain general message-passing systems. These include ones introduced by Cosmos IBC, Polkadot XCM, Axelar, LayerZero, and Wormhole.
This would address common problems in the crypto world and therefore lead to wider adoption. For example, platforms hosting assets from multiple chains could allow users to buy NFTs minted on another chain without moving anything.
At Converge22, Sergey Gorbunov – Axelar co-founder and CEO – explained that with DeFi, users would be able to pool liquidity across multiple assets and chains on a single chain. This enables unified liquidity. Founded in 2020, Axelar is a proof-of-stake (PoS) blockchain that achieved unicorn status this year. In September, the company partnered with Sui blockchain to deliver cross-chain communication through general message passing; thus enabling developers to build exclusively on one chain while still being able to call any function from another.
Hulog oversees a partnership between The Sandbox and the game Guild of Guardians that allows users to play some characters across both universes, Rift is one such project working on this. The focus on players’ experience and engagement in the partnership aids cross-game interoperability, something essential for success in the gaming sector as it continues to grow.
Yoo noted that security concerns still linger in the short term, but chained blockchains would eventually lead to more secure environments.