Bridge Aggregation — The Cross-Chain Interoperability Trilemma & Its Solution

The blockchain industry is all the rage now with blockchain technology serving as the base and backbone for development in the web3 space. What is blockchain? Blockchain is a closed environment ledger made of distributed database which helps in tracking assets and recording transactions. It can be used in any and all industries such as — logistics to track asset status, banking and financial services to record customer transaction records and healthcare systems where it can be used to store patient records and helps track personnel, drugs and day-2-day activities in a medical environment. Due to its distributed ledger nature, blockchains inherently provide better transparency and prevent data forgery helping improve data security.

But as the blockchain industry continued to grow and expand over the last few years, the number of blockchains also increased resulting in the user market base becoming more and more fragmented. This is due to the native design of blockchains which makes them a closed environment with access to data limited to users and participants inside said environment. Even in the same industry, different participants each with their own unique blockchain would lack access to similar blockchains from their peers. This results in a highly fragmented user base and a market with a lot of duplicates leaving users to face a complex environment where every operation is time-consuming and a lack of proper guidelines and navigation systems.

Interoperability — What and Why?

And the answer to helping resolve the fragmented market situation was consolidating the multi-chain ecosystem and its user base via cross-chain interoperability. What is cross-chain interoperability? It is the concept/mechanism which helps facilitate communication and transfer of assets between two entirely different blockchain networks. By facilitating cross-chain interoperability, we will be capable of harnessing the true potential of the blockchain ecosystem. An environment where data and assets can flow freely across different blockchain networks without any friction and without creating any redundant data while completely eliminating any need and requirement for third-party and middle-men requirements which complies with the core concept and reason behind the creation of blockchain technology.

By facilitating improved cross-chain interoperability and communications, we can help address the blockchain trilemma — scalability, decentralisation and security at the same time. Before interoperability came into the picture, the way to go about in the blockchain market was addressing each of these issues individually or settling for a compromising alternative that focuses on improving one or more aspects at expense of others. By facilitating true cross-chain/multi-chain interoperability, we can foster improved data availability and communication. Furthermore, consolidating a fragmented market will lead to increased adoption, a better UI/UX environment and better liquidity flow. These factors would in turn help bring about innovative developments in the web3 space which had previously been handicapped by fragmented blockchain ecosystems.

The Interoperability Trilemma

The common trend with any new invention/innovation is that it comes along with its own unique set of challenges. The same goes for cross-chain interoperability mechanisms. A typical cross-chain communication is facilitated via either messaging protocol which helps send and receive messages or asset bridges which help transfer digital assets between two different blockchains. However, developers and experts in the industry believe that such methods still don’t facilitate complete interoperability.

They say that true cross-chain interoperability is facilitated only when these three pillars are addressed equally at the same time. They are — Generalisability, Extensibility and Trustlessness.

However, at this stage, common cross-chain mechanisms that are widely in practice facilitate interoperability at the expense of one or more of these pillars when they facilitate communication between two different blockchain networks.

Explaining the Three Pillars

Generalisability — The capability of cross-chain mechanism to address any type of data, an agnostic approach which helps facilitate the transfer of any type of data across different chains and not just the transfer of cryptocurrencies.

Extensibility — The ability to provide a user-friendly and simplified way for any blockchain to connect easily with a different blockchain. Be it new or old, each blockchain has its own unique and different core architectures. The cross-chain mechanism should help simplify the integration process and make it easy for two entirely different chains to connect and interact with each other.

Trustlessness — Eliminating the requirement for the participation of unrelated/third-party entities and third-party custody. A trustless mechanism would ensure that users retain complete control and self-custody over their assets at all times and ensure that transactions are executed through smart contracts and happen peer to peer.

The challenges that come up when the three pillars are applied to cross-chain mechanisms in real life reflect in various forms such as -

• Security — Does the cross-chain mechanism use underlying security mechanisms from blockchains to verify and validate the transaction or does it use an external validation mechanism?
• Convenience and Cost-effectiveness — How many supporting transactions does a user have to sign/authenticate to execute a single cross-chain transaction and how much time is taken for the completion of each cross-chain transaction? Is the cross-chain mechanism available in some easy-to-use package or does it require additional development activity to connect two blockchains? How much does it cost a platform to maintain the cross-chain transaction mechanism and how much does a user need to pay in gas fees for making a cross-chain transaction?
• Connectivity — The ability of a bridge to connect with a number of blockchains at the same time. Connect a wide range of blockchains that have similar and different core architecture and programming languages. (EVMs and different Non-EVMs[L1 chains with unique core concepts such as Solana and Aptos] )

Bridge Aggregation

There are many cross-chain bridges and messaging protocols active in the market today that focus on addressing either one or two of these three pillars. But choosing to use a single bridge/messaging service provider to facilitate cross-chain communication and transaction between two chains would leave the dApp platform vulnerable via pillar it fails/lacks to address properly. There are too many instances of users and DEX/CEX losing tokens and assets worth millions of dollars in form of hack attacks focusing on bridge exploits.

To prevent such attacks from occurring and ensure that all three pillars of interoperability are addressed properly, Kana Labs has taken a multi-bridge focusing cross-chain interoperability approach. This way, while a single bridge may not address all three pillars, we will have many bridges which network together in our bridge aggregation layer helping address interoperability trilemma and providing improved and reliable cross-chain transaction solutions. Here at Kana Labs, we combine multiple bridges into one in form of a cross-chain bridge aggregator. This bridge aggregator is made of both our proprietary asset bridges and messaging protocols such as Wormhole, Layer Zero, Celer Network and Axelar.

We use a smart routing algorithm to identify the best price and fastest route to process each cross-chain transaction. This way, all transactions performed by users using our bridge aggregator will be processed in the shortest time possible with a cheaper gas fee in a secure, reliable and user-friendly multi-chain ecosystem.