Cross-chain interoperability has long been a goal, if not a dream, of all chains within the Web3 industry. As many chains have found, cross-chain commerce is much more difficult than anticipated, and even small weaknesses can result in billions lost.
Some chains have worked to develop elements like wrapped assets or other quasi-solutions, but these create a new set of risks and vulnerabilities, and do not seem sustainable in the long term. Instead, a strong cross-chain solution must be developed starting with a strong foundation, and must integrate well fitting pieces at each step.
The Nexera Interoperability Protocol (NIP), which fully integrates the Chainlink Cross-Chain Interoperability Protocol (CCIP) into its bridge, believes it may have the strongest solution yet. CCIP is a level-5 security and robust support for major blockchains, enhancing the security and efficiency of cross-chain transactions. Let’s examine the need for cross-chain absolute reliability for Web3 commerce to succeed, and review the newly launched NIP to see how well it fills this gap.
Cross-Chain Is Critical to Future Commerce
Although the Web3 industry has flourished significantly in the last few years, finding new use cases that are unique to blockchain’s strengths, the ability for various chains and ecosystems to seamlessly integrate has been problematic. In addition to encountering many hacks, crashes, and anomalies, various types of cross-chain interaction has proven to be especially difficult. This is alarming as the world is slowly discovering the true potential for Web3, and may in the next 1-2 years finally reach the much sought mass adoption the industry has been working toward. Global regulators are changing how they view Web3 as well, looking beyond the crypto hype of early blockchain and taking it seriously as a major industry that offers opportunity and needs proper regulation.
A large part of this succeeding is a seamless and reliable way to interact across chains. Without this, the landscape is far too fragmented across chains and platforms to resemble a full industry, and the less technical users who would take part in mass adoption will not tolerate a Web3 that requires complex cross-chain interaction. Indeed, even regulatory bodies are wanting to learn more about elements such as tokenization and the Web3 landscape. The upcoming European Commission’s Workshop on Asset Tokenization will review these topics in order to see how Web3 will integrate with TradFi, and what economic opportunities lie within the industry. A key part of this discussion will be showing that cross-chain interaction is not only possible, it is usable today.
Case Study: Nexera Interoperability Protocol
One of the speakers at the European Commission workshop is Nexera CEO Rachid Ajaja, who will showcase the platform’s cross-chain infrastructure that utilizes CCIP as a key element. The Chainlink Cross-Chain Interoperability Protocol into the Nexera Bridge is a critical messenger component of the NIP, which is comprised of four major pillars:
- Application — This is the customer-facing element, an interface that users interact with to bridge their ERC-20 or ERC-721 tokens
- Router Smart Contracts — These smart contracts are responsible for locking or minting/burning ERC-20 or ERC-721 tokens on the source and destination networks, depending on what the transaction requires
- Teleport Protocol — This protocol connects the application and messaging providers, processing the messages send between parties
- Messaging Providers — These protocols are able to transmit not only messages but also arbitrary data and metadata between networks. In order to verify the messages sent between networks, off-chain validators are used in order to guarantee each message’s accuracy and to keep the process secure. This is where CCIP fits in, acting as a core messaging provider.
The protocol currently supports ERC-20 and ERC-721 tokens, two of the most popular use cases. However, as iterative improvements are made the protocol will expand its support.
All of these elements are critical for the successful cross-chain operations, and working together are able to provide secure, validated transactions that are both fast and low cost. Instead of thinking about the process as a simple messaging platform, the transfer of assets and other key elements is more like the infrastructure needed to deliver a package.
Let’s take a deep dive into the recent updates to the Nexera Interoperability Protocol in our latest article!
— Nexera (@Nexera_Official) May 28, 2024
⚙️ The article will discuss the integration of @Chainlink CCIP as a core messaging protocol and the architectural upgrades that made this possible.
⛓️ Introducing… pic.twitter.com/oTxzNXBfAN
With this comparison, the package being delivered is the actual message/data, with the sender and receiver being two users on different networks. The delivery company’s drop off points are similar to the Router Smart Contracts, the sorting centers are the Teleport Protocol, and the road network itself is the Messaging Providers. If someone wants to send an asset from one chain to another using NIP, they initialize the transaction through the Routing Smart Contracts (drop off the package to the delivery company). The Teleport makes the decisions on what to do with the item and where to send it (the sorting center sends the package to the right truck). The Messaging Protocol (the road network the truck will use) monitors progress and safety of the item, bringing the package to the delivery center where the process is reversed (Teleport, Router Smart Contract, Receiver).
In order to incorporate CCIP as a key component of NIP, the Nexera architecture was heavily upgraded so that NIP could act as an aggregator of messengers, allowing for both scalability while maintaining accurate decision making. Omniscia has fully audited the NIP in its upgraded form, ensuring the platform is robust and ready to securely handle large amounts of traffic.
Next Steps
With a strong use case for cross-chain data, Nexera aims to show what is possible as Web3 works hard to provide a seamless experience for the new wave of users. If successful, the NIP should be able to pave the way for future interconnectivity, bringing together more and more chains that can act as a single, industry-wide ecosystem.
