Blockchain interactions can be tricky and complex, especially for beginners. In this article we will explore chain abstraction, how it works, some of its benefits and challenges, and common misconceptions about it.
What is chain abstraction?
Chain abstraction is NEAR’s concept to simplify the way consumers interact with blockchain technology by isolating it from the user experience. The idea is that customers do not know which blockchain they are working with, or even that they are using a blockchain.
How does chain abstraction work?
Consider a situation where you can only send text messages from an iPhone to other iPhones and not to Android devices. That would certainly be counterproductive and unfeasible. Likewise, users should be able to transact and interact with decentralized applications (DApps) on different blockchains without hindrance. This is where chain abstraction comes into the picture, minimizing or eliminating the complexity of blockchain technology so that the user can just focus on the utility and utility of the DApps being used.
For example, if Katherine plans to interact with a new DApp called XYZ, she doesn’t have to worry about the blockchain on which it is developed. From a user perspective, she just wants it to work well and fulfill its intended function. Likewise, millions of people go online every day, but few of them have any knowledge of internet technology or how it works.
Consider a DApp for conducting transactions and operating within different networks and services. For example, when Katherine uses the XYZ application on her smartphone to buy a cup of coffee, she comes across a coupon for shoes she likes. She buys a pair of shoes and receives points in the form of non-fungible tokens on Ethereum. Later, she sees that there is more to the reward offered and decides to buy tickets for an event, also NFTs but on BNB Smart Chain (BSC).
All of these transactions can take place within a single app without the need to have multiple wallets, switch between networks, or deal with fees directly. This level of cross-chain interaction is the ultimate goal of chain abstraction.
Advantages of chain abstraction
Liquidity is always hidden in certain blockchains, which can be challenging for users and developers to use properly. Chain abstraction solves this by giving users access to liquidity across multiple blockchains. Suppose David wants to borrow his tokens to earn interest on them. If the liquidity is isolated, he would have to look for it on the exact blockchain where his tokens are located. However, with chain abstraction, David could lend his tokens on a platform that connected several blockchains to form a single liquidity pool. This could mean more platform users and lower interest rates for David.
As for developers, chain abstraction offers the ability to create DApps without being bound by the limitations of a particular blockchain. One may use Ethereum for functions such as smart contracts, while another may be more cost-friendly, such as Polygon. For example, Decentraland leverages the Polygon network to allow users to mint, sell, buy and trade avatar wearables without gas fees. It is crucial to highlight that Decentraland uses several aspects to completely eliminate the fees in question. They promote transactions on Polygon and have low fees, but not quite zero fees.
Challenges of chain abstraction
A possible application of chain abstraction is the development of an interface that allows users to access all kinds of applications based on blockchain technology in a more efficient way. But the problem is that this interface can become a single point of failure.
Every blockchain must have its security measures. When integrated into a single interface, it becomes difficult to ensure compliance with all security measures. However, if the new chain abstraction interface is not carefully implemented, it will pose risks to individual blockchains. Another problem that has been observed is the lack of compatibility with other blockchains.
The consensus mechanism and smart contract language can differ from blockchain to blockchain, which makes it challenging to have an ideal interface for all blockchain networks. For example, a smart contract developed using the Ethereum programming language cannot be deployed directly on the Solana network due to the fundamental architecture of the two almost different programming languages.
Misconceptions about chain abstraction
It is important to note that chain abstraction makes inter-string interactions simple, but preserves the individuality of each blockchain. Chain abstraction makes the low-level technical operations simpler and more streamlined to improve the user experience but influence the blockchain architectures.
As mentioned earlier, chain abstraction is about creating blockchains that interact with each other, and while this is an important aspect of the concept, it is not the only one. Chain abstraction also involves defining the interaction between DApps and blockchains, simplifying the deployment of smart contracts and data retrieval between interconnected blockchains.
Closing thoughts
Interactions between other blockchains are also described with the term chain abstraction, which implies their generalization. The benefits of chain abstraction are that it helps break up liquidity and simplify development. It faces challenges in the form of centralization and security risks and potential interoperability issues. Still, it could pave the way to interoperable and user-friendly blockchain ecosystems.