Explore Cross-chain and Its Benefits for Web3 users

Table of Contents

In the rapidly evolving landscape of Web3, the use of multiple blockchains, layer-2 networks, and appchains is becoming increasingly common. However, one of the challenges faced by these diverse blockchain ecosystems is the lack of native communication capabilities with external systems or APIs. This limitation not only hinders the integration of blockchains with existing web infrastructure but also inhibits their ability to communicate and interact with each other. To address this issue, cross-chain technology has emerged as a crucial solution, enabling the transfer of data and tokens between different blockchains.

I. What Is Cross-Chain?

Cross-chain technology refers to the capability of transferring data and tokens between distinct blockchains. It acts as a bridge, allowing blockchain networks to communicate and exchange information with each other. By enabling cross-chain interoperability, this technology enhances the integration of diverse blockchain ecosystems and supports the seamless transfer of assets and data across different chains.

II. Why Is Cross-Chain Communication Important?

Cross-chain communication plays a vital role in building a more integrated Web3 ecosystem and establishing bridges between existing Web2 infrastructure and Web3 services. By facilitating cross-chain smart contracts, interoperability solutions reduce fragmentation within the ecosystem and unlock higher capital efficiency and better liquidity conditions.

The decentralized finance (DeFi) sector has witnessed significant growth, and its permissionless composability has led to the development of increasingly complex applications. These applications allow developers to combine different decentralized applications (dApps) to achieve more than the sum of their parts. However, this composability is impeded by the presence of hundreds of different blockchain networks, as a smart contract can only natively interact with other contracts on the same network. To remain competitive in a rapidly changing multi-chain environment, applications need to be deployed on multiple platforms, resulting in fragmented liquidity and a degraded user experience. Cross-chain communication addresses these challenges by enabling dApps to operate seamlessly across different blockchains, ensuring that users can access and interact with decentralized services regardless of the underlying blockchain.

III. Applications of Cross-chain for Web3 users

Cross-Chain Bridge

A cross-chain bridge is a decentralized application designed to facilitate the transfer of assets from one blockchain to another. These bridges serve as intermediaries between different blockchains, ensuring the secure and transparent movement of tokens between networks. Cross-chain bridges play a crucial role in enabling interoperability and allowing users to leverage the benefits of multiple blockchain ecosystems.

Cross-Chain Swap

Cross-chain swaps are mechanisms for trading tokens issued on one blockchain with tokens issued on a different blockchain in a trust-minimized manner. These swaps enable users to exchange assets between different chains without relying on centralized exchanges or intermediaries. By leveraging cross-chain swap protocols, users can enjoy seamless token transfers and take advantage of liquidity pools across various blockchains.

Cross-Chain Smart Contracts

Cross-chain smart contracts are applications composed of multiple smart contracts deployed across different blockchain networks. These contracts enable the execution of decentralized applications that leverage the capabilities and resources of multiple chains. Cross-chain smart contracts enable developers to harness the unique features of different blockchains while creating a unified and cohesive user experience. This interoperability allows for more efficient and scalable applications that can leverage the strengths of various blockchain ecosystems.

IV. Ensuring Security in Cross-Chain Activities: Preparing to Avoid Scams

As cross-chain activities gain prominence in the blockchain space, it is essential to prioritize security measures to safeguard against potential scams and protect participants' assets. While cross-chain technology offers numerous benefits, Cross-chain is one of many products targeted by hackers. According to a report by Chainalysis, cross-chain bridges are the most targeted by hackers. In 2022 alone, there have been 13 separate cross-chain bridge hacks that have resulted in the theft of over $2 billion in cryptocurrency. Here are several important considerations to prepare for and mitigate potential risks:

Thoroughly Research Cross-Chain Projects:

Before engaging in any cross-chain activities, it is crucial to conduct comprehensive research on the projects involved. Evaluate the credibility, reputation, and track record of the projects, including the teams behind them. Review their whitepapers, technical documentation, and code repositories to gain a deeper understanding of their technology and security practices. Look for audits or security assessments conducted by reputable third-party firms to ensure that the projects have undergone rigorous scrutiny.

Verify Smart Contracts and Bridge Security:

When utilizing cross-chain bridges or participating in cross-chain smart contracts, it is vital to verify the security and integrity of the underlying smart contracts and bridge mechanisms. Audit reports, code reviews, and open-source transparency are indicators of a project's commitment to security. Utilize tools such as Etherscan, BscScan, or other blockchain explorers to examine contract code and transaction history. Look for any past security incidents, reported vulnerabilities, or community discussions that could provide insights into potential risks.

Stay Informed and Engage with the Community:

Actively participating in the community surrounding cross-chain projects can provide valuable insights and help identify potential scams or security vulnerabilities. Join official communication channels, such as forums, social media groups, and developer communities. Engage in discussions, ask questions, and seek clarification from project teams or experienced community members. Staying informed about project updates, security advisories, and best practices enhances your ability to make informed decisions and identify potential red flags.

Exercise Caution with New or Unknown Projects:

Exercise increased caution when engaging with new or relatively unknown cross-chain projects. While innovation is important in the blockchain space, it is prudent to prioritize projects with a proven track record and a strong community presence. Take extra care to scrutinize projects that promise unrealistic returns or employ aggressive marketing tactics. Conduct due diligence by reviewing the project's background, team expertise, and any partnerships or endorsements they claim. Be particularly wary of projects that lack transparency or attempt to rush users into making hasty investment decisions.

Start with Small Transactions:

When initiating cross-chain activities, consider starting with small transactions as a precautionary measure. By conducting smaller transactions initially, you can assess the reliability and security of the cross-chain mechanisms without risking substantial amounts of assets. This approach allows you to gauge the functionality and performance of the projects before committing larger sums of capital.

Utilize Trusted Wallets and Tools:

To ensure the safety of your assets during cross-chain activities, utilize trusted and well-established wallets that support the specific blockchains involved. Research and select wallets with robust security features, such as Multi Signature, hardware wallet integration, and encryption of private keys. Be cautious of phishing attempts and only use official wallet applications or reputable wallet providers. Additionally, employ reliable tools and platforms for cross-chain swaps or bridge interactions that have undergone rigorous security testing.

Multi Signature wallets like Orosign can provide an additional layer of security against hackers. Multisig wallets require two or more private keys to authorize a transaction, making it much harder for hackers to gain access to your funds. In addition, Orosign is completely open to support chains beyond Ethereum like Arbitrum, BNB chain, Optimism,etc.

Orosign is a Self-Managing Mobile App For Digital Assets that serves as an interface of Orochi Ecosystem, which can integrate multiple games and native decentralized applications. Orosign allows users to interact with all applications on Orochi Computation Layer and empowers customers to organize and manage their digital assets.

Orosign is designed for ease of use, even for non-crypto users. You can send, receive or store various cryptocurrencies and digital assets safely and securely with Orosign mobile app.

Currently, Orosign allows customers to create their own multisignature wallet with minimal cost as well as customize smart contracts to meet their own expectations. Off-chain signing and verification are used to secure the signing process. All proofs are verified independently with secp256k1, which is the most widely used elliptic curve in the blockchain space, thanks to its 256 bits security level. Thus, the fund is safe as long as the majority of private keys are safe

Conclusion

Cross-chain communication is a crucial component of the Web3 ecosystem, facilitating interoperability and seamless data and asset transfer between different blockchains. By enabling cross-chain bridges, swaps, and smart contracts, the limitations imposed by the fragmentation of blockchain networks can be overcome. The adoption of cross-chain technology paves the way for a more integrated and efficient blockchain ecosystem, unlocking new possibilities for decentralized finance, decentralized applications, and the broader Web3 landscape.

About Orochi Network

Orochi Network is a cutting-edge zkOS (An operating system based on zero-knowledge proof) designed to tackle the challenges of computation limitation, data correctness, and data availability in the Web3 industry. With the well-rounded solutions for Web3 Applications, Orochi Network omits the current performance-related barriers and makes ways for more comprehensive dApps hence, becoming the backbone of Web3's infrastructure landscape.