The ICON blockchain network’s interoperability network is about to get bigger.
A lot bigger.
Work to integrate the massive Ethereum ecosystem into ICON’s Blockchain Transmission Protocol (BTP) interoperability solution is set to begin in earnest.
Bringing the world’s second largest cryptocurrency network and largest smart contract network into the ICON ecosystem will open a whole new world of possibilities for both users and developers.
- ICON users will be able to take advantage of Ethereum’s massive ecosystem of DApps and services, including its well-known DeFi and NFT platforms, moving assets between the two networks in a seamless fashion.
- Developers who build on the ICON network can benefit from Ethereum’s huge user base, generating more use cases and transactions for their services. As we’ve said before, when you build on ICON, you’re building for communities across many networks.
- The whole ICON ecosystem benefits from potentially far larger numbers of BTP transactions (and BTP fees).
The Merge and finality
ICONLOOP, the chief technology partner of the ICON network and builders of both ICON’s blockchain engine and its BTP interoperability solution, said Friday that in the wake of “The Merge,” full-scale work would begin on connecting Ethereum to BTP, ICON’s “chain-agnostic, scalable, and secure interoperability protocol.”
“The Merge” refers to Ethereum’s much anticipated transition from a electricity-guzzling, environmentally destructive Proof-of-Work (PoW) consensus algorithm to a much greener Proof-of-Stake algorithm.
From a technical perspective, The Merge finally guarantees “finality” on the Ethereum network. Finality is “the assurance or guarantee that cryptocurrency transactions cannot be altered, reversed, or canceled after they are completed.”
In PoW networks such as Bitcoin and Ethereum pre-Merge, it’s possible to create two valid blocks at the same time because miners work in a decentralized way, creating a temporary fork. Eventually, one of these chains becomes the “accepted” chain as blocks are added to it — the so-called “longest chain rule.”
However, transactions on the rejected chain may not have been included on the accepted chain, and be reversed as a result. This is why PoW typically wait until a certain number of confirmations — in pre-Merge Ethereum’s case, 25 confirmations — before considering a transaction “probably” finalized, something called probabilistic finality.
This danger of “roll back” presented certain dangers to integrating Ethereum into BTP.
However, with Ethereum transitioning to a PoS consensus algorithm, blocks are considered finalized when over two-thirds of node validators verify them for addition to the chain. That is to say, once they are added to the chain, there is no going back. This is called “deterministic finality.”
With Ethereum now securing deterministic finality, ICON can finally get to work connecting it to BTP.
BTP can connect to any blockchain network that supports smart contracts. ICON plans to optimize the Ethereum integration to the network’s new consensus algorithm.
Ethereum and BTP: an ocean of new possibilities
Connecting ICON and Ethereum via BTP opens up a lot of potential use cases, especially considering Ethereum’s dominant DApp ecosystem.
- About half of functioning DApps on the market run on Ethereum.
- Ethereum controls nearly 70% of DeFi TVL (Total Value Locked) at USD 51 billion as of August.
- Though Ethereum’s NFT market dominance was sliding earlier this year, it was still 76%.
- Ethereum’s active addresses are consistently in the 400,000–500,000 range
Connecting Ethereum to ICON through BTP would enable frictionless, secure transactions in a fully decentralized manner, free from hacking concerns associated with traditional bridging methods.
So what’s possible now?
For starters, users could transfer ETH to ICON — or ICON’s native cryptocurrency, ICX, to Ethereum — seamlessly and securely. The impact this would have on ICON’s DeFi ecosystem is obvious, opening up new possibilities for collateralized loans, liquidity pools, decentralized trading and more. Likewise, it could promote the integration of ICX into Ethereum’s killer DeFi platforms.
Just as easily, you could move NFTs across networks in a seamless fashion. If you’re building games or metaverses on either ICON or Ethereum, this is a huge step forward, enabling the verification of ownership of tokenized assets in a multichain universe. Imagine using your NFTs purchased on Ethereum’s OpenSea marketplace in Havah, a BTP-powered entertainment and gaming platform developed on ICON SDK. Or using NFTs from ICON’s Craft Network in Axie Infinity or Sandbox. Well, that might soon be a reality.
BTP could even enable cross-chain voting for DAOs established on the Ethereum main network.
Meanwhile, if you’re a developer on ICON, a connection to Ethereum via BTP opens up a vastly larger user base. Adding another 400,000–500,000 potential users is going to add value to any service built on ICON. Developers on Ethereum may even find it to their advantage to build on ICON to take advantage of its lower gas fees and faster speeds.
ICONLOOP Communication team lead Minhwan Kim said, “BTP is the only trustless-based interchain protocol that can connect heterogeneous blockchains. Based on the strength of being able to connect to all blockchain networks where smart contracts exist, ICONLOOP will support and realize the vision of Hyperconnect the World.”