One-Way Interoperability

➡️ The Need for Cross-Chain Communication

Blockchains that have no interoperability with other networks suffer from community isolation.

Leading to...

• Limited liquidity pathways

  • Crypto-to-crypto on and off ramps are non-existent

  • The UX of token access limits value

• Ecosystem lock

  • Holders can't cross-pollinate

  • DeFI utility is bounded

  • Tooling applicability is restricted

• Resilience

  • Single chain ecosystem is fragile

➡️ The problem with interoperability frameworks

Inter-blockchain communication frameworks and standards like Wormhole and Cosmos' IBC have:

Two-Way, permissioned integration architecture:

1. Both communities need to agree on a protocol and standard

2. Both chains must update their source code to be able to interpret cross chain messages

3. Chains become dependent on another's security

4. Is a consensus breaking change that requires a governance action on both sides

5. Is complex to build due to race conditions caused by two block-times

And often require...

Dedicated actors and trust assumptions like:

1. Third party oracles

2. Cherry-picked validators

3. Off-chain relayers

4. Centralized guardians

5. Altruistic light client runners

Resulting in...

1. Extra gas fees

2. Limited throughput

3. Wrapped (synthetic) assets

4. Cost inefficiencies

➡️ Permissionless Interoperability

Canopy employs the first instance of 1-way - permissionless interoperability:

• ✅ only the Canopy chain's governance needs to agree on the new feature

• ✅ only the Canopy chain needs to update their source code

• ✅ interoperability features are composable and may be re-used by any Canopy chain

• ✅ security is still 100% self-reliant

• ✅ far less complex to build as no block-time race conditions

• ✅ trustless BFT agreement, no "trust minimization"

• ✅ no centralization, no off-chain actors

• ✅ no extra fees

• ✅ scalable, sovereign, without inefficiency

Canopy's 1-way interoperability means that multi-chain features can be built simply and without the permission of the 3rd party chain.

This means:

• Ecosystem locked businesses and apps may be 'rescued' by the Canopy chain

• There's limitless ecosystem expansion

• Stable coin on-ramp plugins are re-usable across all Canopy chains, enabling instant liquidity

• Cross-chain collaboration is fostered without effort on any incumbent — enhancing overall adoption and usage of Canopy

• External chains can remain sovereign — while benefiting from Canopy's security and infrastructure

Want to know the "how"? Checkout How does Canopy work?