The parent company of the Bitcoin-based smart contract platform, RSK, announced the launch of a token that serves as a “bridge” for Ethereum.
IOV Labs, the Gibraltar-based developer, announced that this interoperability bridge this week. In addition, he explained that it would allow users to cross digital assets based on RSK and Ethereum. These include the Ether and ERC-20 tokens, through the various protocols.
But how will this be possible? Well, when a user transfers tokens, the bridge’s smart contract blocks the original coins. And, instead, it coined a corresponding amount of new cryptocurrencies in another chain.
In this way, Ethereum-based tokens can be transformed into RSK RRC20. Which, conversely, can also be converted into Ethereum ERC777 tokens.
This would also allow Bitcoin funds to be exchanged quickly and securely by ETH.
In addition, interoperability protocols make it easier for projects to operate in different blockchains. Decentralized applications (DApps) can serve a broader user base. They can even meet the needs of those users who have remained isolated in closed networks.
In turn, projects can take advantage of specific characteristics of different blockchains simultaneously.
One of the RSK strategists at IOV Labs, Adrian Eidelman, explained that:
“Interoperability has been a cornerstone of RSK’s vision from the beginning. We believe that being able to offer the benefits of Bitcoin to Ethereum users and connecting these respective developer communities is a crucial step for the Blockchain ecosystem as a whole. ”
Walking towards interoperability
There are other protocols that offer interoperability between Bitcoin and Ethereum. For example, Wanchain launched a symbolic bridge between the two networks in 2018.
On this project, Eidelman said that Wanchain focuses on connecting Blockchains by being an “intermediary.” The difference from RSK is that it really manages to combine the networks. This allows both ecosystems (Bitcoin and Ethereum) to take advantage of each other’s strengths.
For its part, the Bitcoin stablecoin protocol, Money on Chain, which uses BTC as a guarantee for new tokens, has already assured that it would use the new RSK bridge. This with the objective of crossing its stablecoins in the Ethereum ecosystem.
The co-founder of the project, Maz Carjuzaa, said the new interoperability would combine security and “Global recognition of Bitcoin with the vibrant DeFi ecosystem currently developed in Ethereum.”
The uses for this “bridge” between both cryptocurrencies are quite wide. However, this is still a little explored terrain. That is why companies are expected to allocate more resources to this sector.
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