Interoperability is crucial for the mass adoption of blockchain technology. Every blockchain should be open for developing new value for its users as well as for other blockchains. The below article talks about how an emerging multi-chain ecosystem, Symbiosis Finance, and its cross-chain technology could solve the blockchain interoperability problem.
TAKEAWAYS:
- The crypto world is getting more and more interoperable and symbiotic.
- Multi-chain swaps take decentralized finance to a whole ‘nother dimension.
- With Symbiosis Finance, you can swap assets across multiple chains with one click.
In keeping with the concept itself of decentralized finance (), many projects are creating their own DeFi systems within their own customized blockchain system.
However, this places full reliance on users having to access multiple chains in order to utilize the various features and functionality of these different networks. This can be quite complicated when you consider that each network has its own characteristics and privacy features which are not always compatible with the other blockchain platforms.
If you have used crypto for more than a few weeks, you know the time-consuming and frustrating experience of sending your crypto from one wallet to another. This is true even within the same blockchain.
Call it the "blockchain" problem!
While blockchains are a wondrous achievement, they are still limited in their capabilities. The individual blockchains have their own unique features, but it is incredibly difficult to compete against other blockchains because the assets cannot move between them easily.
A few years ago, atomic swaps were conceptualized as a groundbreaking solution to the problem of inoperability. However, atomic swaps didn’t help make that leap towards a decentralized future. They suffered from some major limitations and setbacks.
This is where Cross-Chain Swaps come in!
Symbiosis Finance may hold the answer to achieving the vision for a true interoperable WEB3 ecosystem through the technology of multi-chain bridges
The Promise of Cross-Chain Swaps
One of the most impressive developments in blockchain applications so far is Cross-Chain Swaps. Aka Multi-Chain Swaps, these are the cross-chain transactions that allow you to trade a token across different blockchains with a single click.
The biggest obstacle to mainstream adoption of decentralized finance is that it is currently siloed into a single blockchain. The reality is that the infrastructure and liquidity in each blockchain ecosystem are very different, and users do not want to be locked into one blockchain alone.
For example, has the most DeFi applications but has low transaction volume; on the other hand, Binance Smart Chain has high transaction volume but lacks DeFi applications. Users want to transfer value from Ethereum to BSC, as well as from other chains like Polkadot or Tron.
Cross-chain swaps provide a solution for this problem. By unlocking multi-chain liquidity, cross-chain swaps strengthen the DeFi ecosystem as a whole by enabling the flow of capital between networks and improving the accessibility of DeFi applications across blockchains.
The cross-chain crypto-to-crypto exchange revolutionizes the crypto industry by eliminating the need for third parties, introducing atomic swaps and eliminating lengthy trading processes by supporting direct exchange via a smart contract. This allows for access to liquidity in any given blockchain and opens the door for traders to capitalize on arbitrage opportunities without needing to own tokens on any chain other than the one they are trading, thereby simplifying one of the largest barriers in participation in cryptocurrency markets.
Symbiosis Finance — DeFi Unbound
Now, a group called “Symbiosis Finance” is offering a solution for crypto holders who want to be able to swap tokens across different blockchains. This project is unique in that it offers a liquidity protocol that allows traders to access symbiotic blockchains. It is aimed at traders and investors who are looking for some freedom, security, ease of use and accessibility while they indulge in cryptocurrency trading.
The core promise of Symbiosis Finance is the seamless and instant swap of tokens across multiple blockchains. A cross-chain swap allows two parties to exchange one type of token for another, provided there is enough liquidity.
Since these swaps are instant, it allows for liquidity to be exchanged seamlessly, as long as there is sufficient liquidity within the pool. This means that once a transaction is sent, it can be received in minutes or seconds. Explained in layman terms, this means that if you own some Ether and want to swap it for Bitcoin, all you need to do is send your Ether to the protocol’s pool address, and the platform will automatically send back Bitcoin to your wallet address. The price will be equal or close to the market price (depending on slippage).
The complexity behind this simple operation is that both Bitcoin and Ethereum are running on different blockchains with a different consensus mechanism. This creates a problem where liquidities need to be locked up in order to be available when another party wants to perform a swap in the opposite direction.
Symbiosis Finance aims to make cross chain swaps a seamless and standardized experience accessible for everyone. The platform has a unique cross-chain architecture that keeps growing. It is now integrated with some of the leading networks—AvalanchePolygonAlgorand
Symbiosis currently supports 1-click cross chain swaps for BTC, BCH, ETH, LTC, DASH, DOGE, USDT, DAI and dozens of ERC20 tokens. The teams over at Symbiosis are also working aggressively on adding support for as many chains as possible.
What Sets Symbiosis Apart?
Symbiosis Finance is one of the most advanced Cross-Chain Protocols on the market. It provides a Uniswap-like user experience in terms of ease of use and convenience.
Unlike other decentralized exchanges (DEXs), Symbiosis doesn’t require you to deposit your tokens into the pool or wait for your coins to get unlocked.
Other cross chain protocols, such as Cosmos and Polkadot, require the user to send their tokens to a centralized (on-chain or off-chain) exchange, which then swaps the tokens and sends them back to the user’s wallet address. In this process the user is losing deposit and withdrawal fees, as well as a level of control over their funds.
Symbiosis is a non-custodial DEX, meaning no entity, not even Symbiosis’ dev team, has access to users' assets. It also provides on-chain verifiable transactions to its users.
Symbiosis has its own liquidity pool, where lending and borrowing can be easily done by users, allowing our customers to earn interest or borrow money against their staked tokens in our liquidity pool.
Parting Thoughts About Blockchain Interoperability
Symbiosis Finance opens a lot of doors for crypto investors, traders and hedge fund managers who have strong portfolios in certain cryptocurrencies that they wish to hold but would also like to speculate on other cryptocurrencies. This tool will save time and money, which is the main hindrance when it comes to executing trades between multiple blockchains. Symbiosis Finance could become a core component to every major exchange and in every HODLers portfolio.
The vision of a decentralized crypto-economy is one in which global trade can occur frictionlessly, quickly, and securely between various blockchains. This vision is unlikely to become a reality unless we solve the challenge of cross-chain token transfers. Today, it is still quite a cumbersome and inefficient process. This laborious process becomes even more problematic when you consider that there are hundreds of different blockchains. If the goal is truly to create an open global economy, we will eventually need a "universal" system for transferring value across all these blockchains as well as any future ones.
While we may still be in the early days of the development of the crypto-economy, it is already clear that interoperability will play a vital role in the evolution of this new economic paradigm.
That being said, Cross-Chain Swaps may still be struggling with the same issues that prevented atomic swaps from going mainstream, mainly scattered liquidity — albeit better than that of atomic swaps. We’ll have to wait to see how this will pan out.
