Blockchain Education: Making Sense of Blockchain Interoperability | SafeMoon Gaming: Tomorrow's Event [FIFA 23] | Food for Thought | Reminders
🎓Blockchain Education
Making Sense of Blockchain Interoperability
In the blockchain world, various technologies can feel like puzzle pieces that don’t always fit together. That’s where interoperability comes in, allowing blockchains to interact and share information and making it easier for people to use multiple blockchains to do things like buying and selling.
How does blockchain interoperability work?
Crosschain protocols help different blockchains communicate and share information, making it simpler for users to exchange things like money or data between similar networks. However, because not all blockchains work the same way, achieving interoperability can be challenging. Each blockchain has its own way of achieving interoperability or its own way of making things work together smoothly.
Methods to Bridge the Gap:
Atomic swaps allow for the secure trading of tokens between different blockchains without relying on centralized exchanges, reducing the risk of fraud or hacking. The tokens are not physically exchanged, but rather their ownership is swapped. Decentralized exchanges (DEXs) can facilitate atomic swaps, which are often automated through Hash Timelock Contracts (HTLCs) to ensure security and accuracy. (You can learn more about HTLC below!)
Notary schemes are a type of trusted intermediary used to verify events on one chain using a federation of trusted people. The federation verifies if something happened on Chain B and then provides a signature to Chain A to prove it. This method can be used to create a federated pegged sidechain, where assets locked up in Chain A can be used on Chain B. While this method is simple, it requires trusting the federation, which limits the social scalability of blockchains. The notary can be a single exchange or a group of exchanges working together, but the effectiveness of the method depends on the integrity of the notary. However, even if multiple notaries are used, this method still relies on a centralized component. Examples: Liquid and THORchain
Relays are systems that help one blockchain understand events and changes on another blockchain without using a trusted third party. A relay is a contract on one blockchain that functions as a light client of another blockchain, using its standard verification procedure to verify block headers fed into the contract. Relay chains can be designed to facilitate both one-way and two-way communication between member chains, depending on the implementation. To enable two-way interoperability between blockchains, relay architectures use a central hub called a relay chain. Relay chains are separate blockchains that function as light clients for connected “member” blockchains. Member chains can leverage information on other chains by messaging through the relay chain, which tracks part of the state of all connected chains and can be given a degree of control over assets on those chains. Relay chain architectures work best with blockchains with certain characteristics, such as flexible multisig capability and fast consensus finality. Examples: Polkadot and Cosmos
Hashed TimeLock Contracts (HTLC) are special contracts used in blockchain to make sure transactions are secure and happen within a specific time. To do this, it creates an escrow that needs a secret passphrase to release the payment. If the recipient doesn't enter the right passphrase and claim payment in time, they lose access to the payment. HTLCs check transactions with multiple signatures and have two important parts: the hashlock and timelock. The hashlock is a secret code that unlocks the funds, while the timelock sets the time limit for when the payment can be made. This helps modify payment channels in blockchain. Example: Bitcoin Lightning Network
Sidechains are separate blockchain networks that connect to a parent blockchain, also known as the mainnet. They have their own consensus protocols that improve the privacy and security of the network and minimize the trust required to maintain it. The main purpose of sidechains is to allow for smoother asset exchange between the mainnet and the secondary blockchain. To transfer digital assets between the mainnet and the sidechain, a two-way peg is sometimes required, which enables the transfer of digital assets without any counterparty risk. Some sidechains are designed for one-way transfers or have other mechanisms to ensure asset security. Smart contracts are used to transfer digital assets between the two blockchains, ensuring that validators on both the mainnet and sidechain act honestly, and confirm cross-chain transactions. Funds are released on the sidechain once the transaction is verified, allowing users to move digital assets across both blockchains. Examples: Liquid Network and RootStock (RTK)
Oracles act as intermediaries between the cryptocurrency world and the non-crypto world. They allow for the transfer of off-chain data onto a blockchain, which is vital because blockchains only manage on-chain activities. Essentially, oracles act as a bridge between on-chain and off-chain data, ensuring that everyone is using the same accurate information. With the help of oracles, automation of real-world transactions has become possible. For instance, a decentralized exchange can use an oracle to track the stock prices of companies listed on the NYSE, allowing people to trade security tokens without a centralized brokerage. Oracles can also facilitate the trustless transfer of real-world assets like property. However, it is important to note that such transfers still require the involvement of legal and regulatory frameworks outside the blockchain. Blockchain oracles, in terms of DeFi, allow for accurate price feeds on DEXs and help with automating buy/sell orders. Oracles also help manage crypto collateral and loans on decentralized lending platforms. Without oracles, these functions would not be possible in a decentralized and automated way. Examples: Chainlink and Band Protocol
Blockchain routers facilitate communication between multiple blockchain networks by serving as a mediator. Different blockchain networks such as Bitcoin and Ethereum are treated as separate parts called subchains within the blockchain router architecture. Subchains can only connect to the blockchain router and not directly to each other. To allow communication between subchains, the blockchain router uses a cross-chain communication protocol. All data recorded on sub-chains is stored on a blockchain. The blockchain router creates a secure connection between chains, which enables the communication between subchains. As a side note, this approach is not as widely adopted as other interoperability solutions, such as relays or sidechains.
Why is interoperability important?
Blockchain-based networks require careful design to ensure security against malicious actors. However, different blockchain designs offer varying benefits and trade-offs in terms of security, privacy, efficiency, complexity, and more, making a one-size-fits-all solution impossible. Interoperability between blockchains could mitigate these issues and allow for a seamless exchange of information and assets. While most layer-1 blockchains lack built-in interoperability features, methods are being developed to increase their ability to work together. This would be especially useful for companies that use different blockchains to transfer value. With interoperability, it would be easier for banks to move money around safely and quickly on different networks.
Wrapping Up
Interoperability in the blockchain industry means different blockchains can communicate and share information, allowing people to use multiple blockchains for things like buying and selling. Atomic swaps allow for token trading without trusting others, but not token transfers. Cross-chain technology is being developed to enable moving tokens between blockchains without needing someone else to help. Different blockchains have their own ways of achieving interoperability due to varying designs and trade-offs. Interoperability would allow for safe and quick transfer of value across different networks and benefit companies that use different blockchains.
Overall, achieving interoperability is essential for the growth and adoption of blockchain technology. By allowing different blockchains to communicate and work together, we can create a more connected and efficient ecosystem that benefits everyone involved.
Sources:
“What is blockchain interoperability: A beginner’s guide to cross-chain technology.” Cointelegraph. https://cointelegraph.com/blockchain-for-beginners/what-is-blockchain-interoperability-a-beginners-guide-to-cross-chain-technology Accessed 22 Mar, 2023.
“The Ultimate Guide to Blockchain Oracles.” Worldcoin.org. (20 Nov, 2022) https://worldcoin.org/articles/what-is-an-oracle-in-blockchain#:~:text=Examples%20of%20blockchain%20oracles,a%20single%20point%20of% 20failure
Frankenfield, J. “Hashed Timelock Contract (HTLC): Overview and Examples in Crypto.” Investopedia. (1 Feb, 2022) https://www.investopedia.com/terms/h/hashed-timelock-contract.asp
Roth, S. “An Introduction to Sidechains.” CoinDesk. https://www.coindesk.com/learn/an-introduction-to-sidechains/ Accessed 22 Mar, 2023.
Larsen, A. “A Primer on Blockchain Interoperability.” Blockchain Capital. https://blockchain.capital/top-highlight-a-primer-on-blockchain-interoperability/ Accessed on 22 Mar, 2023.
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💭 Food For Thought
“What’s money? A man is a success if he gets up in the morning and goes to bed at night and in between does what he wants to do.”
- Bob Dylan
“Your comfort zone is a place where you keep yourself in a self-illusion and nothing can grow there but your potentiality can grow only when you can think and grow out of that zone.”
- Rashedur Ryan Rahman
“Courage is what it takes to stand up and speak, and to sit down and listen.”
- Winston Churchill
Reminders
SafeMoon Special - Hello Again
SafeMoon Pulse Monthly Recap
Each month, the SafeMoon Pulse offers a comprehensive SafeMoon overview of the previous month, including any updates or changes you might have missed. The latest issue of the SafeMoon Pulse is now available, covering all the important information from February 2023!
Click here for the corresponding Pulse article
SafeMoon Wallet: How to Sell Crypto Guide
SafeMoon Orbital Shield
SafeMoon released a technical explanation of their patent-pending security product, SafeMoon Orbital Shield.
Need a slightly more simplified explanation?
PoA Article
What is PoA, and what are its advantages?
Learn more by clicking the image below.
Recent Captain's Logs
SafeMoon Exchange
SafeMoon CEO John Karony talks about SafeMoon's Centralized Exchange
(CEX) progress in the Captain's Log video below.
SafeMoon Blockchain
CEO John Karony gave a quick update on the SafeMoon blockchain explaining a bit about the chosen consensus mechanism and release expectations.
Token Monetization Innovation (TMI)
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TMI aims to improve transparency and transaction predictability by charging the exchange fees upfront in the native token and using smart contracts to ensure transparency in token liquidity pairings. It also aims to expand the availability of web3 and enable additional community partnerships with meaningful projects.
TMI SafeMoon Newsletter Captain's Log.
pSFM Migration
Attention pSafeMoon holders ONLY.
The pSFM Migration Campaign is now LIVE!
Only use the official dApp link on the SafeMoon Website.⚠️
Have the tokens you want to use for migration in your wallet.
Don't transfer after the cutoff date/time
Have a small amount of ETH for gas fees
Tokens acquired in wallets after the cutoff date/time won't be eligible
The pSafeMoon process will remain live for a minimum of six months.
Migrate your pSafeMoon tokens to SafeMoon V2 tokens
The pSafeMoon Guide now includes an updates section so you can be aware of any issues relating to pSafeMoon. In addition, you'll find some FAQs to keep you all up to date.
Tokenomics Supervisor
SafeMoon announced that with the recent SafeMoon SWaP updates came a new patent pending feature that solves the existing Defi inconsistent fee paradigm for tokens on multiple Decentralized Exchanges.
Press Release: [Businesswire]
They partnered with "Blockchain and AI expert Dr. Adel Elmessiry to help solve the inconsistency. Labeling the invention "Tokenomic Supervisor," they explain that it operates in 2 steps:
Token Registration
Token SWaP
To learn more, view the full article here.
Security Questions (Best Practice)
🎓You might have seen that SafeMoon Orbital Shield requires users to answer 2 security questions.
⚠️We highly encourage reading our Best Practice article to learn about a safer method for answering these security questions!
Slippage and Gas Articles
You may have heard of slippage and gas related to the transactions you make when trading your digital assets on the blockchain, but do you know what they are, where they come into play during a transaction, or even why they exist?
SafeMoon Education Manager Cats published two new educational articles for those interested in understanding more.
⬇️Click on the image of the subject you'd like to learn about first.⬇️
↙ Learn about Slippage (Left) and Gas (Right) ↘
Understanding SafeMoon Transactions Article
🎓Want to understand more about what happens when a SafeMoon SWaP transaction takes place? Here's an article that can help you understand the process a bit further.
Check it out by clicking the image below. 👇👇👇
SafeMoon Career Opportunities
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SafeMoon Gaming
