AllianceBlock (ALBT) Cross-Chain NFT Bridge Use Case With Hedera Consensus Mechanism | Interoperability Beyond ERC-20 and ERC-721

3 min read

AllianceBlock Bridge, the fully decentralized interoperability solution that was released in early July, has been built with a very specific purpose in mind: to become the standard for bridging ERC-20 tokens as a single-point-of-access. Keeping this in mind, the AllianceBlock team has continued to develop the bridge to support a number of top blockchains, including Ethereum, Binance Smart Chain, Avalanche, Polygon, Energy Web, Arbitrum, and Optimism. With the release of the Bridge SDK, they also begin to see first DeFi projects use their solution to achieve interoperability.

The team has decided to change the course of development, in order to bridge various types of information and open up the possibility of more use cases. With the implementation of the cross-messaging protocol in the Bridge, different networks can be connected and any arbitrary data can be exchanged.

By creating a messaging protocol, the team will be able to create a base layer for different applications. This allows not only the use of gateway contracts for specific functionalities (e.g. ERC-20 Bridge, ERC-721 Bridge, etc.) but also the use of custom contracts and the protocol without any additional infrastructure setup. The protocol will be governed by a set of validators and contain smart contracts and consensus logic on supported chains. The consensus mechanism will continue to use the Hedera Consensus Service, which guarantees that messages will be transferred securely and in a trustless manner.

To drive adoption of the protocol and of ALBT, the bridging fees for every message will be paid in the networks’ native currency, which will be swapped for ALBT in shared pools. Similarly, ALBT will be used to pay the validators who secure the protocol. Energy Web, a major layer one blockchain, has already started adopting this solution offering EWT fees that are then swapped to ALBT in a shared pool.

Cross-Chain NFT Bridge on AllianceBlock (ALBT)

Through the implementation of the cross-messaging protocol into AllianceBlock Bridge, interoperability can be achieved in many more areas of the industry, one of them being the exciting world of non-fungible tokens (NFTs). As NFTs become more popular, interoperability problems begin to arise. With the NFT Bridge functionality, built on top of the messaging protocol, users will be able to bridge non-fungible tokens to and from multiple networks and use them on the different dApps built on those networks.

The messaging protocol will transmit the messages, and the NFT Bridge contracts will encode and decode those messages, fetch and forward signed transmissions to those contracts, and execute the app-specific logic. Using the bridge, a wrapped version of the selected NFT will be created on the destination chain that is identical to the one locked on the source chain. Upon bridging back to the native chain, the NFT will be unlocked on the native chain and burned on the source chain. When bridging between two non-native chains, the NFT will be burned on the source chain and minted on the destination chain.

AllianceBlock (ALBT) Protocol Diagram

Developing Interoperability Bridge beyond ERC-20 and ERC-721 

The initial idea was to build a bridge that only developed according to the current ERC-20- focused approach. During development reviews, however, we realized that we can separate the logic related to the validation of the messages and the dApp’s smart contracts, which would allow us to easily plug in other dApps and support different standards in the future.

This means we can deliver on our objective of becoming the industry standard and help even more parts of the industry achieve seamless, trustless interoperability. Being built on top of the messaging protocol, the NFT Bridging will be fast and secure and users will pay the bridging fees in the native currencies of the relevant network. This also means that NFT Bridging is just one of the many upcoming use cases that can be explored using AllianceBlock Bridge.

How does the new approach improve the functionality of the Bridge and increase the utility of ALBT?

The current ERC-20 bridge will be migrated to the protocol after the NFT Bridge implementation. The bridging mechanism will remain the same, but users will be able to pay the fees with native currencies, so they will no longer be required to possess ALBT. However, ALBT will still have its use case — the collected fees will be swapped for ALBT and validators will be paid in ALBT. This means that we’ll be able to open up our bridge to even more projects and users, who will be benefiting from AllianceBlock Bridge and using ALBT without even knowing it. In order to continue increasing the utility of ALBT, we will also introduce a minimum ALBT amount required to be staked in order for a third party to become a validator, thus locking even more of our native token in the mechanics of the AllianceBlock Bridge.

About AllianceBlock

AllianceBlock is bridging the gap between decentralized and traditional finance by remedying issues in both spheres and linking them more closely together. They see the future of finance as an integrated system in which the best of both worlds can work together to increase capital flows and technological innovation.

They are building this future by bridging traditional finance with compliant, data-driven access to new decentralized markets, DeFi projects and ecosystem-scaling tools such as funding and interoperability. As such, they are building a next-generation financial infrastructure that aims to provide regulated financial entities worldwide with the tools they need to access the DeFi space seamlessly.

Via this site