The blockchain revolution continues to garner mainstream attention as the prospect of a decentralised and permissionless future for the web begins to take shape. But this future cannot be taken for granted. The threat of centralisation within the Web3 space has begun to grow, with major Web2 players such as Meta seeking to take control of developments. At the same time, the increasing fragmentation of the crypto space poses major issues. There are over 10,000 different cryptocurrencies currently available. According to Coin Market Cap, 82 of these currencies have a market cap of over $1bn.
In many respects, these dangers go hand-in-hand. As the number of different blockchain protocols and active cryptocurrencies grows, the desire for simple, centralised solutions increases.
To preserve Web3 from the twin dangers of fragmentation and centralisation, we must embrace interoperability as a core principle. By ensuring that different chains can interact in a simple, efficient, and user-friendly way, we can maintain the overarching unity and composability of the crypto space while supporting the broadest range of innovative projects. Most importantly, the push toward interoperability will mean that all this can be achieved without resorting to a central point of control.
Below, we’ll look at some of the major ways that Cudos has prioritised interoperability at every stage, from the technical architecture of the Cudos network to our ever-growing list of major partnerships. We’ll also look at how interoperability supports a number of key use-cases for blockchain tech, particularly in the rapidly developing world of DeFi.
Pursuing cross-chain support
A major risk facing the crypto space is the siloing of assets on different chains. This can be clearly observed from developments in the NFT space, which have largely taken place on the Ethereum blockchain. Ultimately, the revolutionary impact of NFTs on digital ownership will be limited if the assets in question are tied to Ethereum and cannot be easily transferred to other chains. This would fundamentally restrict how NFTs can be traded and the platforms they can interact with – hardly a marker of truly open and decentralised digital ownership.
To help solve the issue of silos within the crypto space, Cudos has embraced cross-chain support from the outset. As part of the Cosmos ecosystem, the Cudos network can utilise the Inter-Blockchain Computation (IBC) protocol. This protocol acts as a standard for interoperability between all chains supported by the Cosmos SDK. It not only allows for quick and efficient transferring of assets to and from other Cosmos-supported chains but also enables the building of cross-chain applications.
The Cudos network also supports transfers to and from Ethereum using the Gravity Bridge. The Gravity Bridge is a Cosmos-SDK blockchain that solves key interoperability issues stemming from Ethereum’s probabilistic determination of transaction finality. By doing so, Gravity Bridge ensures that assets from the Ethereum chain can be transferred into the Cosmos Hub. From there, they can be easily dispersed across Cosmos chains, including Cudos.
Interoperability and the future of DeFi
The benefits of this level of interoperability between chains are particularly evident within the DeFi space. The promise of DeFi as a revolutionary alternative to the existing, highly centralised financial system will be substantially limited if it is difficult or impossible to execute cross-chain transactions or develop DApps that offer cross-chain compatibility. This is particularly the case for more advanced use-cases, such as real-time lending between different chains. Indeed, as noted above, we have already seen centralised, custodial solutions to this problem emerge within the DeFi space. Such developments threaten to undermine the very promise of decentralised finance.
Further, the availability of cross-chain development solutions allows for a modular approach to building DApps. This means DApps can combine the specific benefits of different chains – such as, for instance, the decentralised cloud computing resources that will be offered through the Cudos network. This type of modularity will be key to DeFi achieving its full potential as a transformative shift away from the world’s dominant, centralised financial structures.
Establishing key partnerships
Not only have we endeavoured to build interoperability into the technical architecture of the Cudos network, but we’ve also sought to establish partnerships across the crypto space with pioneering organisations that share our ethos. We recognise that interoperability relies on a collective, collaborative push toward open, connected solutions. And that’s why we’ve been busy building significant, ongoing links with the most relevant projects.
In December, for instance, we announced a partnership with Glitter Finance, a company innovating cross-chain solutions to support developments in DeFi. Glitter Finance will build a bridge between Cudos and Algorand in Q1 2022, with plans to subsequently bridge Cudos with Polygon, Solana, and Terra.
We have also embarked upon an exciting collaboration with the Elrond blockchain, enabling developers on their network to utilise computing resources provided by Cudo Compute. This is a major step toward delivering decentralised hosting capabilities for DApps, without which future developments in Web3 will lack a truly decentralised foundation.
How can you support the Cudos network?
As the Cudos network approaches its mainnet launch, we need your help in ensuring the network is secure, robust, and efficient. A fully decentralised and maximally interoperable future for blockchain technology requires a collaborative effort.
So we’d love you to register your interest today and join our incentivise pilot phase.
For developers, you can participate in Phase 4 of our testnet to help ensure the network is rigorously tested before the mainnet launch. Join our Discord server and support us.
And if you are currently a Cudos token holder, make sure you know how to migrate your ERC-20 tokens to the Cudos blockchain.
Cudos is powering the metaverse bringing together DeFi, NFTs, and gaming experiences to realise the vision of a decentralised Web3, enabling all users to benefit from the growth of the network. We’re an interoperable, open platform launchpad that will provide the infrastructure required to meet the 1000x higher computing needs for the creation of fully immersive, gamified digital realities. Cudos is a Layer 1 blockchain and Layer 2 community-governed compute network, designed to ensure decentralised, permissionless access to high-performance computing at scale. Our native utility token CUDOS is the lifeblood of our network and offers an attractive annual yield and liquidity for stakers and holders.