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Poly Network Blockchain Review

The ability to interlink different blockchains to facilitate cross-chain transactions and data transfer is detrimental to the success of blockchain technology. 

Currently, most blockchains operate each one separately with limited ability to transfer value to and from others except the manual procedures we know. In other words, traditionally without cross-chain technology, if you wanted to send money from one blockchain to another, you would need to go the tedious way of first converting one digital asset to another before sending and receiving through wallet addresses. You would need wallets in both blockchains and then an account with the exchange service. In fact, the process is too manual for most business and corporate applications that require automation. 

In most cases, sending crypto from one wallet of a given blockchain directly to a different wallet of a different blockchain using a wallet address will result in the loss of the crypto altogether. This also introduced centralized data silos on blockchains. 

While interconnecting blockchain is not simple to achieve, it may also help eliminate redundancy on blockchain networks. It will also assist in scaling blockchain resources that are limited and allow people to enjoy fuller benefits of the ledger technology as one resource. It allows people to make the best use of any blockchain regardless of which one is their home, and to completely utilize other blockchains regardless of which they call home. For example, Bitcoin users will be able to leverage smart contracts on Ethereum without having to move from the Bitcoin chain. Secondly, you won’t have to pay the extra cost to an exchange service to exchange crypto to another just for the reason of having the second type of crypto for instance when you want to trade it or invest it on a different blockhain.  

Basically, most cross-chain protocols achieve cross-chain transfers by using sidechains that communicate with the mainchain. The sidechain may introduce some additional data to the main chain by modifying its headers and other places to allow the chain to sync and verify incoming transactions without requiring knowing the entire main chain. The main chain does not have to monitor the sidechains but for it to receive transactions from the sidechain, it must require cryptographic proofs of the transactions. Hence the transactions sent from the sidechain are not spendable on it until they are added into an incoming blockchain. 

The different blockchain projects involved in blockchain cross-chain technologies include Poly Network, Cosmos; Wanchain that aims to link private, public, and consortium chains; AION, which aims at developing standards for blockchain; Blocknet; and Polkadot, which seeks to enable the transfer of smart contracts between chains. 

Poly Network

What is Poly Network?

Poly Network is a protocol targeted at making homogenous and heterogeneous blockchains interoperable or having the ability to exchange transactions, smart contracts, data, and value without an intermediary party such as a crypto exchange. The protocol allows the exchange of assets or crypto between different blockchains without issuing a token and without involving a lot of integration work. It also does not involve built-in smart contracts. Unlike other interoperability protocols that work for homogenous chains, it works on all types of blockchains as long as they are integrated.  

It is built by a consortium of Neo and Ontology, Poly Network. The network launched its main net last year and has already begun transfers of cross-chain assets between blockchains.

Currently, it has implemented interoperability for over 10 blockchains including Bitcoin, Ethereum, Neo, Ontology, BSC, Heco, Elrond, Zilliqa, Binance Smart Chain, Huobi ECO Chain, and Cosmos-SDK. So far, it has made it possible to transfer over 0.2 billion U.S. dollars across these chains, from one chain to another in a non-traditional way.

It allows users to launch cross-chain smart contracts across blockchains that support smart contracts. For those that do not support smart contracts, a module will need to be integrated into both to allow cross-chain transactions. 

Advantages

- Allows transfer of crypto of digital asset from any blockchain to another for purposes of trading the asset in another blockchain or taking another advantage in the second chain. This is without paying excessively or doing many manual transfer steps as with normal sending and receiving. 

- You do not need major changes to any blockchain to make it interoperable with others – only two smart contracts for blockchains that support smart contracts, or two modules for blockchains that don’t. 

- Integrating a chain means you also interconnect with all isometric chains that connect to it before the integration. 

- Supports all types of blockchains. 

- Supports atomic transactions. 

- Supports cross-chain transfer of assets and information. 

- Supports secure transactions, and can meet legal compliance for companies and entities.  

Use cases of Poly Network

Cross-transfer of cryptocurrencies across blockchains

Cross transfer of supported cryptocurrency from one chain to another can now be done by a few steps without involving massive wallet addresses, accounts, and logins on different blockchains. It is easier than sending crypto from one wallet to another. Simply choose the two networks from and to which you want to transfer, connect wallets, and confirm the transaction.   

Cross-chain Decentralized Exchanges

Decentralized exchanges in most cases utilize the native token of the given exchange to swap digital assets. That comes with several limitations like the inability to transact some assets directly until you exchange one to the exchange’s native token. Most of these exchanges introduce a swapping fee where you must pay to sell your token to the exchange’s native token to do other things. 

However, with cross-chain DEXs, a user is not limited to using any native of an individual decentralized exchange. This removes the bottlenecks involved in using platform native tokens. 

For anyone launching a decentralized exchange, this means the problem of non-interoperable protocols is removed. The DEX can support a wide range of tokens and coins without the exchange being involved in costly integrations. 

Credit

The cross-chain security deposit will become easier to set up because there would be no need of setting up a security deposit on each blockchain to expand a credit service. 

Stablecoins

Cross-chain transactions and information exchange allow those expanding stable coin businesses to avoid developing an ecosystem for every blockchain. They would need to simply deploy a deposit contract to lock assets in a cross-linked blockchain and send a message to the mother chain for verification.  

All cases involving security deposits

This includes liens, clawbacks, court orders, financial derivatives, bankruptcy, and collaterals. One can lock assets from one chain in a different chain using conditions that are dependent on the first chain. 

Cross-chain contracts 

One can deploy smart contracts on one chain to perform any function like paying dividends to holders of an asset registered on a different chain.    

Cross-chain data transfer, information storage, and sharing of resources. 

How it works

Poly Network establishes a new chain (Poly Chain) that acts to coordinate blockchain that wants to interoperate. Relayer entities are also implemented to watch for incoming cross-chain operations and complete transactions on the chain the transactions are sent. 

The Poly Chain maintains block headers from the two or more chains that want to interlink, regardless of whether they are public, private, or other consortium blockchains. The validators on the Poly Chain run full nodes of the participating blockchains. Thus the Poly Chain will independently confirm its transactions, but each block confirmed will have information about a synchronized state of the entire multi-chain network. The synchronized state is achieved by the relayers. The relayers will pick a transaction sent from one chain, update the transaction’s state on the Poly Chain, then acquire validity proof from the Poly Chain (after approval of the transaction by Poly Chain validators) needed for it to port the said transaction to the destination blockchain. 

The destination blockchain can use validity proofs to verify the validity of the transaction and treat it as acceptable. 

The relayer entities run a node of Poly Chain and the nodes of any participating blockchain. Thus they bear significant costs. However, they are incentivized with rewards directly tied to the original transaction.

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