The key to mass blockchain adoption

Blockchain’s status is growing exponentially. Business spending on blockchain is predicted to be $11.7 billion by the fourth quarter of 2022, and one of the main drivers for this is the increased importance of data integrity, security, decentralization and operational reliability. As more businesses and people become aware of blockchain’s transformative potential, new milestones are undoubtedly said to be reaching.

Web 3.0 firms have spearheaded innovations in the crypto space and are seeding Blockchain into the heart of organizations’ business processes and adding significant value in enterprise solutions. Several DLT ecosystems and applications have emerged to meet the niche needs of industries and provide solutions for a variety of applications.

Despite this, blockchain is yet to witness mass adoption.

Part of this slow adoption can be attributed to the technology’s inherent characteristics: that it happens very gradually up to 8-10% before exploding in use. However, a main reason for this cessation can be attributed to the fact that blockchains and dApps lack the ability to connect, transfer data and interact with other chains. This is known as “interoperability”.

Interoperability: The tipping point for mass adoption

Blockchains, as they stand today, are independent ecosystems. Each chain is independent, has its own set of codes, and is not easily readable by another blockchain.

In practice, this means that the features and benefits of blockchain ‘A’ are available to users who ‘lock in’ to chain A’s ecosystem. Users will not be able to access their data (such as assets, holdings, files and values) on any other chain.

This can not only lead to the centralization of access and control in a particular blockchain, but also deprive the user of the benefits that another blockchain can offer.

And that is why interoperability is important. It allows a blockchain to communicate, read data from another blockchain and share information.

Businesses have diverse needs in any given transaction that require multiple networks to work together. As the World Bank and IMF report highlights, there is an urgent need for blockchain interoperability in the context of business operations and the digitization of trade and e-commerce.

Especially in the case of decentralized finance, having opportunities to access value across chains can allow liquidity pools to be adequately leveraged. Take, for example, cross-chain protocols like Konstellation, which aim to efficiently connect funds across chains.

All in all, Inter-Blockchain Communication (IBC) will allow cross-network chains and on-chain applications to work together securely without the need for one-to-one integration and expensive costs. Interoperability enables the best of all worlds to be leveraged across application horizons and helps blockchain reap its true potential.

Towards a collaborative, connected future

In an effort to close the gap between the various blockchains, a growing number of interoperability initiatives such as Polkadot and Cosmos have emerged. They want to make it easier for networks to connect and ensure that decentralization is fully realized.

IBC can enable the direct use of assets locked in one network in another without impairing each other’s economic prospects in industries such as DeFi.

In that way, Konstellation has entered the DeFi ring with a strong purpose: to allow liquidity across chains in the capital market segment.

The project aims to improve the composition of DeFi markets, make crypto-assets more accessible and the transfer of assets between chains smoother. Their platform will unite the fragmented segments of the blockchain industry, be it NFTs, cryptocurrency liquidity or other crypto assets.
✨KONSTELLATION Network is a blockchain protocol, built on the Cosmos Network SDK, creating a global infrastructure for the future of the decentralized capital markets.