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Composability in Blockchain

Composability refers to the ability of a smart contract to interact with another smart contract’s state. Applications are composable when they can read from and write to other applications, facilitating seamless interaction.

Synchronous Composability

This form of composability occurs within the timespan of a single block. For example, a flash loan requires borrowing and repaying within a single transaction, which must be completed in one block. DeFi applications on the same chain typically interact synchronously.

Asynchronous Composability

Asynchronous composability allows interactions between applications across multiple blocks, enabling cross-chain interactions. Although interactions can theoretically take infinite time, practical implementations use timeouts to limit interaction duration. This type of composability is crucial for applications on different chains to interact effectively.

Understanding these mechanisms and classifications helps in appreciating the intricate functionalities of blockchain interoperability. Each type of bridge and composability offers unique advantages and challenges, contributing to the evolving landscape of blockchain technology.

Simple Payment Verifications (SPVs)

SPVs allow clients to verify transactions on a blockchain without downloading the entire blockchain. Users only need the block’s header to confirm the transaction’s existence within that block.

Relayed SPVs

Relayed SPVs operate by submitting and verifying block headers through the sending chain. A smart contract on the sending chain accumulates these headers and sends an SPV proof to a counterpart smart contract on the receiving chain, eliminating intermediaries in cross-chain communication. This method ensures direct and secure information relay across connected chains.

Federations

Federations consist of groups of participants that collaborate to verify and confirm transactions between chains. The number of signers varies based on the security model’s requirements. These participants act as nodes, managing the flow of information between chains.

Bonded Federations

In a bonded federation, signers stake a certain amount of money to verify cross-chain transactions. This mechanism enhances security, as staked funds are slashed if malicious actors sign fraudulent transactions.

Trusted Federations

Trusted federations rely on the good intentions of their participants. These groups, while maintaining the flow of transactions, do not have explicit incentives to prevent fraud. Their primary function is to ensure smooth transaction processing.

Bridge Classifications

Chain-to-Chain Bridges

Chain-to-chain bridges are designed primarily for asset movement between two blockchains, typically using the lock and mint mechanism. Examples include Polygon’s PoS Bridge, Binance <> Ethereum Bridge, and the Avalanche Bridge (AB).

Multi-Chain Bridges

These bridges facilitate asset transfers across multiple blockchains and can be deployed on any L1 or L2 blockchains. Examples include Connext and cBridge.

Specialized Bridges

Specialized bridges focus on specific ecosystems, supporting fast and cheap cross-chain transactions within those regions. For instance, Hop enables asset transfers across Ethereum Mainnet and L2s, while Across focuses on transferring assets from L2 rollups to Ethereum Mainnet.

Wrapped Asset Bridges

Designed for non-native asset transfers, wrapped asset bridges create wrapped assets on the destination chain, representing the original assets from the source chain. Examples include wrapped BTC, Interlay, and wMonero.

Data Bridges

Arbitrary Messaging Bridges (AMBs)

AMBs facilitate the transfer of any data, including tokens, chain states, contract calls, NFTs, or governance votes, between blockchains. They form the foundational layer for dApps, enabling cross-chain composability.

• Native Bridges: Connect two blockchain ecosystems, ensuring trust-minimized messaging between chains. Example: Rollups and their native bridge with Ethereum.
• Third-Party Bridges: Built to connect various blockchains beyond Ethereum, enhancing blockchain connectivity. Examples include LayerZero, Wormhole, Axelar, Hyperlane, and Chainlink CCIP.

dApp Specific Bridges

While technically not bridges, these dApps connect to multiple blockchains, creating an ecosystem that allows value transfer across blockchains similarly to bridges. Examples include Thorchain, Anyswap, Wanchain, and Synapse.