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The ICF’s Cross-Chain Interoperability Report 2024 highlights the growth of cross-chain ecosystems, the role of key interoperability protocols, and emerging trends shaping the future of decentralized networks.
As of October 2024 (the last data recorded by the ICF), total transaction volume across the major interoperability protocols exceeded $41 billion. Ethereum continues to dominate flows in nominal terms, leading both outflows (47.9%) and inflows (38.9%) across blockchains.
The most active cross-chain route is from Ethereum to Arbitrum, the report notes, with a total volume of $10.7 billion. This underlines Ethereum’s central position in facilitating the movement of assets between networks.
Key protocols and emerging trends
There are several major players in the field of interoperability between chains. The ICF has brought the Total October Value (TVL) for 43 interoperability protocols to $8 billion.
In terms of connectivity, Interchain’s Inter-Blockchain Communication (IBC) protocol has led the way by connecting 117 blockchains, although more recent protocols Hyperlane (with 120 chains) and LayerZero (with 114 chains) have caught up.
Circle’s CCTP has established itself as the go-to for high-volume cross-chain transactions, rivaling IBC for monthly active addresses exceeding $1.5 million.
A key trend identified in the report is the rise of intention-based bridging protocols. These protocols, such as Stargate and Across, allow users to specify their desired outcomes (for example, an asset transfer from one blockchain to another) without having to worry about the underlying technical details of the transaction path.
“Intent-centric bridging protocols have emerged as the preferred method for fast and low-cost cross-chain asset transfers,” the report explains, underscoring their growing importance for improving user experience and streamlining cross-chain operations.
Future innovation and challenges
The report also highlights the increasing interest in zero-knowledge proofs (ZKPs) as a tool for improving scalability and security in blockchain interoperability. ZKPs enable the verification of transactions across different networks without relying on third-party validators, reducing costs and improving efficiency. As ZKPs continue to develop, they are expected to play an important role in the next phase of blockchain interoperability, helping to address some of the challenges existing protocols face.
Fragmentation remains a major challenge across space. As new networks spread, interoperability becomes more complex. While interoperability protocols have made progress, the sheer diversity of blockchain ecosystems – including different consensus mechanisms, data structures and security models – poses barriers to seamless integration, the report notes.
Despite the advancement of solutions like IBC and LayerZero, there is still no universal bridge connecting all top chains, especially when it comes to communication between Ethereum rollup solutions and other ecosystems.
This lack of uniformity hinders scalability, as protocols designed for specific networks may have difficulty adapting to others. Without addressing these fragmentation issues, the promise of a fully interconnected blockchain ecosystem cannot be realized. As the industry evolves, finding ways to connect disparate ecosystems will be critical to unlocking the full potential of dapps.
