Interoperability, defined as the ability of blockchains to communicate with one another, plays a significant role in the development of crypto ecosystems. However, the current blockchain industry has some problems regarding this. Because most blockchains were created using different standards and code bases (which makes each blockchain unique), they are not inherently interoperable with other blockchains. This means that all transactions must be completed within a single blockchain regardless of how many features it may have.
Presently, base layer protocols are unable to communicate with one another efficiently. For instance, Layer-1 protocols like Ethereum or Cosmos feature smart contracts which only allow secure data exchange within their respective ecosystems.
Cross-chain messaging protocols allow blockchains to read data from and/or write data to other blockchains and are the cornerstone of blockchain interoperability. Cross-chain messaging protocols are quickly being regarded as the best strategy to increase connectivity between blockchains. To put it simply, it is a new technology that aims to make it possible for value and information to be transmitted between several blockchain networks.
Router Protocol serves as a bridge that uses this kind of new technology to enable the transfer of messages and tokens between blockchains, initially concentrating on the use case of transferring assets using stablecoins across several layer 1 and layer 2 networks. It is a mesh network of chains connected by a number of nodes that serves as an expandable cross-chain bridge. On each of the chains that are connected to the network, these nodes have bridge contracts installed. In order to allow value transfers between chains, bridge contracts have the ability to listen to transactions and carry them out. A variety of methods, such as locking assets in the source chain and unlocking or minting assets in the destination chain, can be used to transfer value.
The protocol can be used to do cross-chain operations without bridging assets by relaying data between chains. Router Protocol expands the composability of DeFi across different blockchains by enabling the passage of arbitrary messages across chains in addition to asset transfers. In theory, this allows the interoperability of smart contracts across many blockchains, maximizing the use of DeFi.
This cross-chain protocol enables three (3) main features:
Transfer resources between chains. Users can simply send their DAI from Polygon to Fantom.
Router enables the exchange of asset A from chain X to chain Y for asset B. For instance, users can use Voyager to exchange USDT on Ethereum for DAI on Polygon.
Create DApps that allow cross-chain lending, governance, and many other features on chains with and without Ethereum Virtual Machine (EVM).
Ramani Ramachandran, Shubham Singh, Chandan Choudhury, and Priyeshu Garg founded Router Protocol in August 2020. These people are proven experts in their field and are responsible for the success of Router Protocol’s rapid growth.
Several investors, including Coinbase Ventures, Alameda Research, Polygon, and Woodstock, contributed to Router Protocol's strategic funding round. The protocol intends to use the funds to expand and improve its technical and marketing capacities.
Router Protocol is solving a problem that the crypto ecosystem needs to gain mass adoption. As of now, Router supports cross-chain transactions between ten networks - Ethereum, Polygon, BSC, Avalanche, Fantom, Harmony, Arbitrum, Optimism, Cronos, and Aurora. It also supports all the major wallets, including MetaMask, FortMatic, Torus, Portis, and Bitski. Other than these wallets, you can use Router with any wallet that is WalletConnect compatible.
The protocol is still in its early stages. Given its network, financial support, and technical aptitude, it is with no doubt that Router Protocol can establish the project in a pivotal position and turn it into the foundation of all cross-chain transactions.
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