Why Cross-chain Messaging is So Popular

Over the past year, cross-chain messaging protocols have experienced a surge in popularity.

Wormhole, which launched in 2021, recently marked a major milestone by surpassing 1 billion cross-chain messages. The platform has facilitated a total transfer volume exceeding $39 billion through its token bridge.

Likewise, Axelar has experienced significant growth, with interchain transactions and active addresses increasing by 478% and 430% respectively over the past year.

The applicable method for transferring assets and information across various blockchain networks relies on blockchain bridges. However, these bridges pose challenges, especially in terms of decentralization.

Typically, blockchain bridges use a lock and mint or burn and mint approach to facilitate the transfer of value between blockchains. Users must lock their real assets on one chain, exchange them for equivalent synthetic assets, transfer them to another chain, and then convert them back to real assets. While ensuring instant resolution, this process is complex and susceptible to security risks, including malicious attacks.

Wormhole itself suffered a significant attack in 2022, resulting in the loss of more than $320 million in ether, marking one of the largest DeFi exploits to date.

In response, custodial bridges have emerged, introducing a centralized entity to oversee asset custody and bridge security. However, this centralized approach goes against the principle of decentralization, which requires users to place their trust in a single entity.

Another approach involves unified liquidity pools, where multiple chains share the same liquidity pool, thereby increasing capital efficiency across connected blockchains. However, this method requires all chains to meet liquidity requests, and insufficient liquidity may cause complications and does not guarantee instant settlement.

Recognizing these challenges, the focus has shifted towards improving existing connecting infrastructure through cross-chain messaging solutions.

According to Robinson Burkey, CCO at the Wormhole Foundation, cross-chain messaging protocols serve as the underlying infrastructure, providing a common language and framework for secure data transmission between incompatible systems. These protocols lay the foundation for building token bridges.

Axelar's General Message Passing (GMP) is a leading cross-chain messaging solution that acts as a translator for incompatible networks. GMP uses self-executing smart contracts to validate and authenticate transactions across multiple chains, simplifying the connecting process for developers and users.

Although GMP represents an improvement over traditional bridges, it is still in its infancy. Galen Moore, global communications leader at Interop Labs, highlighted the potential for programmable interoperability to go beyond bridges entirely. This next stage of evolution aims to automate complex tasks, such as minting tokens on multiple blockchains simultaneously.

Axelar's recent launch of interchain token service (ITS) aims to advance this vision of automated interoperability. The goal is to create a Web3 environment where developers can seamlessly connect to functions and networks across multiple chains, turning the internet into a more decentralized and interconnected ecosystem.

Wormhole also enhances its interoperability capabilities through the ZK roadmap, which aims to facilitate multichain communications and increase the assumption of trust in the protocol. This roadmap involves leveraging zero-knowledge proofs (ZK) to verify the validity of messages sent between blockchains thereby strengthening decentralization and message verification.

Overall, the development of cross-chain messaging protocols and interoperability solutions represents a significant step towards realizing a more interconnected and decentralized future for blockchain technology.

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