Since the introduction of the first blockchain-powered digital currency-Bitcoin by Satoshi Nakamoto in 2008, the original distributed ledger technology has undergone considerable transformations, providing the world with innovation-rich third-generation blockchains such as Polkadot, XDC Network, and Near Protocol.
With blockchains becoming mainstream, the application of decentralized technology has also been increasing rapidly. However, the blockchain world is now witnessing a buzz around cross-chain or multichain technology as businesses and end-users seek an interoperable ecosystem that can leverage various blockchains’ unique features and capabilities.
The growing need for interoperable blockchains corresponds to the overwhelming popularity of cross-chain dApps. Withross-chain decentralized applications, enterprises can scale and expand the usability of their dApps across a variety of blockchain ecosystems.
To develop cross-chain applications, the developers need Web3 blockchain Networks like Polkadot, which provide a backend to run the cross-chain or multichain dApps.
What makes Polkadot Network unique?
Most second-generation blockchain ecosystems suffer from numerous speed, scalability, and interoperability limitations. Gavin Wood, the co-founder of Ethereum, introduced a heterogeneous multichain blockchain network, Polkadot, to address these general issues in the blockchain space.
Given that cross-chain communication is imperative for the growth of the blockchain ecosystem and the mass adoption of blockchain across diverse industries, Polkadot has emerged as a next-generation layer-0 decentralized protocol.
Polkadot facilitates interoperability among many blockchain networks built as parachains and connected to the Relay chains. For non-parachains, Polkadot features bridges that allow two isolated blockchains to interact.
While most third-generation blockchains have a common goal of addressing interoperability concerns, Polkadot excels with its attribute supporting cross-chain sharing of arbitrary data, tokens and assets rather than just the tokens.
Compatibility with Substrate framework
The Substrate is an open-source blockchain development framework designed to empower the multichain future. Note that Parity technologies itself used Substrate to build the Polkadot Network. Hence, every blockchain built with the Substrate framework is inherently interoperable to the Polkadot, creating an interoperability-rich ecosystem of non-identical blockchains.
Economic and transactional scalability
Economic scalability on the Polkadot is offered due to its approach of appointing common validators to regulate security on multiple blockchain networks.
Transactional scalability is provided on Polkadot with the approach of distributing transactions across multiple blockchain networks running independently on their chains.
Compared to conventional blockchains, Polkadot consumes only a small fraction of energy with its innovative nominated proof-of-stake (pos) consensus algorithm, supporting the low-cost development of its ecosystem.
According to recent research conducted by CCRL- Crypto Carbon Ratings Institute, Polkadot has been rated as a blockchain protocol with the lowest carbon footprint.
Polkadot also stands apart from its counterpart blockchains in facilitating interoperability and the development of innovative dApps.
The heart of Polkadot, the Relay chain, is responsible for providing the network’s shared security, consensus and cross-chain interoperability. Hence, Polkadot Parachain’s governance runs independently but is united in security.
Polkadot adopts a DAO-based sophisticated governance model that gives the network’s stakeholders a voice, eliminating the hierarchy system. Furthermore, upgrades on the Polkadot are ordained on-chain without the need of forking, where stakeholders are authorized to participate in deciding the governance of the platform.
How does Polkadot support the development of cross-chain Web3 apps?
Built as a web3 blockchain interoperability network, Polkadot provides a multichain ecosystem to develop a wide range of cross-chain web3 applications. The network interconnects different blockchains, forming a decentralized web of blockchains.
Cross-chain applications built on the Polkadot can interact with the web3 applications, perform cross-chain computations and maintain security across active chains.
Since Polkadot itself is built using the Substrate framework, a blockchain and associated dApps built on Substrate are automatically interoperable with Polkadot’s parachains and parathreads. Substrate offers a range of tools and SDKs to support the development of cross-chain dApps.
Parachains are layer-1 blockchains that run with their own runtime logic, native tokens, and stipulation for implementations and economies. Any blockchain built as parachain becomes fully interoperable with the Relay chain and other parachains. Hence, the Web3 applications built on a parachain’s ecosystem can interact cross-chain.
Parathreads provide the same benefits as parachains, such as cross-parachain interoperability, parachain-to-parachain communication through XCM and support for the development of cross-chain Web3 dApps. However, parachains can leverage the Relay Chain’s security without requiring to lease a parachain slot.
Polkadot believes in enabling true interoperability. While Substrate-based chains and parachains/parathreads are inherently interoperable with each other, Polkadot scales greater interoperability with external blockchains like Ethereum through Web3 bridges. These bridges facilitate communication between blockchains, allowing them to seamlessly share resources, arbitrary data, and digital assets.
What cross-chain Web3 applications does Polkadot support?
Cross-chain NFT marketplace
With NFT trading thriving as a million-dollar industry, NFT technology has been finding various industries, and the need for cross-chain nft marketplaces has increased over time. Instead of restricting users’ access to a specific nft marketplace’s ecosystem, enterprises now seek more ways to allow the users to explore multiple marketplaces, powering the global mass adoption of nfts.
Polkadot’s multichain ecosystem caters to the rising need of NFT marketplace users by supporting the development of an interoperable nft marketplace.s These marketplaces allow users to mint, trade, and explore the nfts sold on various on-chain marketplaces.
For example, Argoran is a cross-chain marketplace recently deployed on Polkadot, inspiring enterprises to bring more creative projects to contribute to the growing ecosystem of Polkadot Network.
How does cross-chain NFT marketplace work:
While single-chain-based NFT marketplace limits NFT minting to a particular marketplace, cross-chain NFT marketplaces solve this trilemma of interoperability by allowing the NFT traders or owners to mint NFTs on a variety of marketplaces that runs independently on different blockchain ecosystems.
Enable the marketplace users to trade digital assets via nfts on multiple nft marketplaces and trade non-fungible tokens. Hence, it avoids switching back and forth between unique marketplaces to use those marketplaces.
Live auctions on cross-chain NFT marketplaces are similar to online nfts auction, which involves bidding and buying. However, it stands apart from the ability to support users’ access to different nft marketplaces that exist and run on independent chains. Users can look at NFT being put on auction over these marketplaces; they can bid or sell nfts and profit from it.
As cross-chain nft marketplaces welcome nft traders from diverse marketplaces, amplifying the user engagement significantly.
Cross-chain nft marketplaces are powered by interoperable smart contracts, which help marketplaces optimize their features and functionalities by leveraging the capabilities of the parallel marketplace. For instance, the marketplace can use the unoccupied space of the other marketplace to extend its existing storage capacity.
Cross-chain crypto lending platform
A crypto lending platform is a DeFi (decentralized finance) ecosystem that facilitates lending-based activities such as crypto loan processing and collaterals. A crypto lending or loan platform allows the investors to lend cryptos to the interested borrowers, intending to receive interest in exchange.
When powered with the interoperability attributes of the Polkadot Network, crypto lending platforms enable cross-chain functionalities to its users, allowing them to make deposits, lend loans, and manage their investments on lending platforms running on different isolated ecosystems.
How do cross-chain lending platforms works:
Cross-chain crypto lending platforms enable the borrowers to interact with loan providers on multiple loan platforms. Likewise, lenders can explore various crypto lending platforms and have the opportunity to earn maximum interest rates.
To challenge the shortcomings of the order book method, cross-chain lending platforms use lending pools and automated market makers (AMM) to automate the lending and borrowing process. Users from various platforms can withdraw the specified amount of assets from this pool in loan and repay as required.
Cross-chain lending platforms allow the users to submit collateral on a blockchain platform (built on Polkadot) and get crypto loans from a different platform (built on Ethereum). This way, lack of interoperability does not feel like a hurdle for the users. They can get loans in their preferred cryptos, regardless of which platform they originally belonged to.
Cross-chain decentralized exchange
A cross-chain or multichain DEXs is a decentralized marketplace that enables peer-to-peer crypto trading. Compared to traditional decentralized exchanges, cross-chain DEXs provide the users with the facility to explore the assets and involve in the exchange of assets across a variety of DEXs that are built and managed on unique blockchain ecosystems.
Cross-chain DEXs help enterprises provide better user satisfaction, allowing them to seamlessly trade digital assets across various blockchain-based exchanges. With that, enterprises benefit from high user engagement and enhanced services.
How do cross-chain DEXs work:
Atomic swap or cross-chain swap is a technology that enables the swap of two non-native tokens between unique blockchain ecosystems. It is one of the essential components of DEX, for it powers the idea of complete interoperability in the blockchain space.
Automated market maker
AMM is based on blockchain and its operations rely on smart contracts. Users on a cross-chain DEX can benefit from quick trade matching, liquidity pools, and high interest on multiple DEXs that use AMM for automating trades.
Cross-chain decentralized exchanges implement DEX aggregators to solve the liquidity challenges. The aggregators essentially function as a platform that aggregates liquidity from various DEXs, providing the users with a unified and enhanced experience.
Cross-chain Web3 wallet
Cross-chain Web3 wallets are the optimized version of the regular decentralized wallet. Talking about a digital wallet, it’s a blockchain-powered wallet that facilitates buying, selling, and storing of crypto tokens, allowing users to access it via a user-friendly interface. This wallet also acts as a gateway to Web3 dApps, allowing the developers to access a blockchain ecosystem right in their browser without running a full node.
When powered with an interoperability element, a crypto wallet becomes a cross-chain wallet that can connect to multiple blockchain ecosystems and provide unique wallet addresses to each blockchain, facilitating quick and seamless transactions.
How do cross-chain wallets work:
Gateway to Web3 ecosystems
A single cross-chain Web3 wallet enables the users to access a variety of blockchain ecosystems, eliminating the hassle of maintaining multiple keys and other credentials.
Data security and management
A cross-chain wallet generates passwords and keys for dApps running on different blockchain ecosystems, allowing the users to keep track of their data and ensure IRS security.
With a cross-chain wallet, users can connect to various dApps running on unique blockchain ecosystems. For instance, a single wallet is required to connect to Ethereum and Polkadot’s dApps.
Cross-chain Web3 bridge
Bridges are a viable solution to a blockchain protocol’s inability to interact directly with another blockchain that runs on its isolated ecosystem. Talking specifically about the Polkadot, it enables parachain-to-parachain and parachain-to-substrate-based chains. For communication between non-parachains, Polkadot supports the development of cross-chain Web3 bridges in its ecosystem.
Enterprises can take inspiration from the popular cross-chain bridges, including Acala, built and managed on the Polkadot’s ecosystem. Also, Polkadot bridges are easy to customize to support specific use cases.
How do cross-chain bridges work:
Data and resources sharing
Cross-chain Web3 bridges are designed to support arbitrary data and resource sharing between independent blockchain networks. For instance, a user can share smart contract logic and token details from one blockchain to another.
Token and digital asset sharing
Cross-chain bridges support sharing of digital assets and tokens between non-interoperable blockchains. Users on a decentralized exchange can transfer fungible and non-fungible tokens to other DEX running on a different blockchain ecosystem.
Besides information and data sharing, cross-chain Web3 bridges enable blockchain projects to utilize the unused storage of other blockchain projects, eliminating the barriers related to the storage during Web3 development.
What are tools and technology stack required for cross-chain Web3 development on Polkadot?
Polkadot offers a wide range of tools to support Web3 development on Polkadot’s ecosystem. Based on your project-specific needs, you can choose essential tools and leverage its benefits:
Rather than building a wallet from scratch, you can use wallets already built on the Polkadot’s ecosystem to support your DEXs or payment dApps.
- Polkadot-JS apps explorer
Dev tools and frameworks
- Polkadot Launch
- Fork-off substrate
- Substrate front-end template
- Polkadot JS browser extension
- WebAssembly (WASM)
Polkadot cross-chain Web3 applications development services by Omatech
At Omatech, we are a team of Polkadot experts passionate about building new-age solutions corresponding to the changing industry trends and blockchain project-specific needs. From DeFi to gaming and NFTs, our team is ready to take up every challenge that leads to successful projects.
Corresponding to the enterprise-based requisites, we build a wide range of cross-chain web3 applications on the Polkadot ecosystem to fuel innovation into enterprises’ existing business models.
Our team has hands-on experience developing substrate-based customized blockchains that grant users access to interoperable Web3 ecosystems that can directly interoperate with Polkadot Network. Below is the list of our Polkadot-based development services focused on cross-chain technology:
- NFT marketplaces
- DeFi solutions
- Lending platforms
- web3 bridges
- Digital wallets
Furthermore, Omatech undertakes on-demand Web3 application upgrade projects for solutions built on the Polkadot ecosystem. We provide end-to-end assistance to enterprises, helping them launch their customized decentralized solutions launched and deploy them on the interoperable ecosystem of Polkadot.
Although Polkadot was initially designed to address the interoperability issue, this network is now widely recognized as a scalable, faster, and highly secured blockchain ecosystem, aiming to form a unified ecosystem of layer-1 blockchains.
As an open-source blockchain protocol integrated with web3 elements, Polkadot supports the development of cross-chain compatible dApps and revolutionary decentralized apps that align with the present as well as future obligations of the decentralized world web.