$2.9B Transfers & 115 Blockchains Connected

As we commemorate the third anniversary of the Inter-Blockchain Communication (IBC) protocol, it’s a pleasure to have Susannah Evans, the IBC Product Lead at Interchain Foundation, with us.

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IBC has emerged as a stalwart in the realm of interoperability, boasting reliability and a proven track record. Its inception, rooted in the pursuit of seamless communication among diverse blockchain networks, has significantly minimized the need for third-party intermediaries, setting a benchmark for best practices in the field.

With 115 blockchain zones currently integrated through IBC and an impressive $2.9 billion in transfers recorded in the past month alone, the protocol’s growth trajectory is undeniable. Susannah’s insights into this expansion and its implications for the broader blockchain ecosystem are sure to provide valuable perspective.

Additionally, we’ll explore the role of the Interchain Foundation’s backing in shaping IBC’s evolution into a standardized framework for blockchain interoperability, along with recent developments highlighting IBC’s adaptability in real-world financial operations.

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Can you explain the significance of IBC turning three years old and its impact on blockchain interoperability, particularly considering its ability to enable chains to send and receive any type of data encoded in bytes?

IBC turning 3 is significant because it is the oldest and most used interoperability protocol – this means its endured the test of time – it is extremely reliable and battle-tested.
“IBC was developed with core values in mind – to enable interoperability (cross chain read, write as well as token bridging) between two chains and only have to trust the consensus of those 2 chains, not a third party or additional chain in the middle.”

Susannah Evans, the IBC Product Lead at Interchain Foundation
In other ecosystems, especially ethereum we are seeing the consequence of not prioritizing interoperability as a core primitive of the blockchain. There are many app level interoperability solutions that have made trade os, particularly around the trust assumptions to be cost effective within the EVM and this is becoming even more relevant given the rollup centric roadmap.

IBC has set a benchmark and aspiration for interoperability best practice.

With 115 blockchain zones connected through IBC and $2.9 billion worth of transfers in the last 30 days, how do you foresee the continued growth and impact of IBC on the broader blockchain ecosystem?

The IBC network will continue to expand – the more chains that are a part of the network, the more attractive it becomes for new chains to join. Previously IBC was connecting CometBFT and Cosmos SDK based blockchains, but adoption of the protocol has matured and we see blockchains of different architectures being able to connect to the network – the Polkadot ecosystem, and Ethereum for example.

There is work in progress for integrations to many other ecosystems, some publicly announced such as Avalanche and the work by Toki finance to connect BSC and some which have yet to be publicly announced.

The problem with solving the blockchain interoperability problem is that outside of IBC, interoperability is seen as an application, typically deployed as smart contracts, not part of the core blockchain protocol.

For an interop solution to span the broader ecosystem, it must be credibly neutral, therefore no fee extraction at the transport layer is a prerequisite and should not require a trusted intermediary to achieve this – the solution space converges towards IBC so I think IBC is definitely going to play an important role in defining the future of interoperability for the broader blockchain space.

How does the Interchain Foundation’s funding of IBC development contribute to its evolution into a standardized protocol for blockchain interoperability, and what role does it play in the enterprise space?

ICF’s funding plays a big role in the development of the protocol, however there are many contributors not funded by ICF and actively working on bringing IBC to new ecosystems – a testament to there not being a single point of failure for the protocol to continue to be developed.

Could you discuss how the recent adoption of a cross-chain asset issuance and management platform by MUFG showcases IBC’s adaptability in large-scale financial operations?

It shows the flexibility of IBC as an interoperability solution, for diverse use cases, spanning multiple user groups and is a strong signal for adoption as MUFG is one of the largest financial institutions in Japan.

How does Ethereum’s latest Dencun upgrade and the introduction of Ethereum IBC enhance the scalability and modular design of the network to meet user demands, particularly in terms of supporting light client-based interoperability?

The Dencun upgrade introduced proto-danksharding and reduced the gas fees for end users on rollups by around 90%, although Base has seen increased user demand and so the savings have not been as noticeable.

For light client based interop between rollups, you need to be able to verify that a transaction is posted to the data availability layer, and that the execution of that transaction is valid – with Dencun, posting data to ethereum as the data availability layer also becomes cheaper – any upgrade which would pass on a cost saving to the end user is going to be positive for user demand.

However, this poses a critical question – the feature has been a massive improvement for the scalability of ethereum, but as shown by Base’s increased usage – does the pace of implementation of scalability improvements keep up with the pace of user demand?

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For more information on the Inter-Blockchain Communication (IBC) protocol, visit their website at https://interchain.io/ and stay updated by following them on Twitter at https://twitter.com/IBCProtocol.