Benefits of Cross-Chain Development

Liquidity

One of the biggest cross-chain use cases in the expansion of DeFi applications is the ability of applications to tap into massively expanded liquidity. Different projects on different chains only issue tokens on the network on which they’re deployed. One of the easiest ways to move liquidity from one network to another is to lock up funds with a bridge and use wrapped assets on the network of the user’s choice. This means that if the user wants to trade their ETH on Solana, where transactions can happen faster and cheaper, they can. The project whose assets are being transferred to other networks gets the benefit of increased usage and utility, while the project incorporating these xAssets gets access to greater stores of liquidity and projects to interact with.

Community

Community is a growing area for cross-chain development. As projects on individual networks mature, they naturally seek out other projects to build partnerships and launch joint ventures. By connecting with projects cross-chain, they can build interconnected DAOs.

Identity

Finally, going cross-chain allows developers to ask for pieces of information about their users from other networks. For example, one of the biggest identity ecosystems is ENS, the Ethereum Name Service. Accessing cross-chain data (xData) about a user allows developers to implement a “Login with ENS” system even on the Solana blockchain. Solana xApps could read the information about the end user’s avatar, screen name, crypto addresses, and more without the user needing to re-upload that information.

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Wormhole

Wormhole

Cross-chain interoperability protocol connecting high value blockchains