Chainlink debuts new protocol aimed at boosting cross-chain interoperability

In simple terms, Chainlink’s Cross-Chain Interoperability Protocol (CCIP) is now open for use, promoting greater communication and compatibility between different blockchains.

With the protocol, developers can utilize CCIP for transferring tokens between blockchains and sending messages to smart contracts without requiring explicit permissions.

Smart contract developers can now call and initiate functions on contracts deployed on different blockchains, thereby enhancing the connectivity and compatibility of cross-chain smart contracts.

According to Chainlink’s co-founder, Sergey Nazarov, the general availability of CCIP’s mainnet will simplify and quicken the development process for designers, enhancing cross-chain communication.

In an announcement shared with CryptoMoon, Nazarov wrote:

“CCIP is now starting to become the standard for both capital markets blockchain transactions across banks, as well as the way that secure Web3 cross-chain value and data is moved across public chains.”

Using cross-chain bridges, users can carry out transactions between various blockchain platforms. These bridges hold crucial roles in the crypto world, but they also introduce potential risks.

Chainlink is one of the leading companies focusing on cross-chain compatibility, an essential aspect that the crypto industry currently lacks. Since separate blockchain networks cannot interact directly without such solutions, interoperability is crucial.

In early April, Chainlink introduced Transporter, an intuitive app for facilitating token communications between blockchains. The ultimate goal is to enhance the security of cryptocurrency transactions across different chains through an user-friendly interface that’s accessible to beginners.

The security foundation of Chainlink’s Transporter is provided by CCIP, described as the sole cross-chain protocol that reaches the highest level of security (level-5) by a Chainlink representative.

Nine different blockchains host the CCIP (Cross-Chain Interoperability Protocol), which are Arbitrum, Avalanche, Base, BNB Chain, Ethereum, Kroma, Optimism, Polygon, and WEMIX. The team behind CCIP intends to expand its presence by integrating with additional networks in the future.

CCIP intends to assist financial institutions in tapping into the potential $500 trillion market of tokenized assets. This is achieved by providing improved access to liquidity for assets across various blockchains, according to a representative from Chainlink who spoke with CryptoMoon.

“CCIP is part of a larger Chainlink platform that enables financial institutions to fully unlock tokenized assets by helping them overcome their data, cross-chain, compliance, and synchronization needs.

Cross-chain interoperability remains a pressing industry concern

Cross-chain bridges, because of their intricate technological nature, present significant risks in current cryptocurrency systems.

Beginning in 2016, a staggering $5.85 billion in cryptocurrency has been pilfered from decentralized finance (DeFi) platforms. Approximately half of this amount, equating to $2.83 billion, can be attributed to attacks on cross-chain bridges as per DefiLlama’s statistics.

Chainlink debuts new protocol aimed at boosting cross-chain interoperability

Vitalik Buterin, a co-founder of Ethereum, has voiced his reservations regarding cross-chain infrastructure in the past. In a Reddit post dated January 2022, he expressed his worries that instances of 51% attacks on interoperability bridges between blockchains may become more frequent.

“The more usage of cross-chain bridges and apps there is, the worse the problem becomes. No one will 51% attack Ethereum just to steal 100 Solana-WETH… But if there are 10 million ETH or SOL in the bridge, then the motivation to make an attack becomes much higher, and large pools may well coordinate to make the attack happen.”

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2024-04-24 19:19