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  • Julie McKenna

Interoperability: The Bridge Between Blockchain Networks

Updated: Mar 15

Without interoperability, blockchain technology risks remaining siloed and underutilized. It's interoperability that unlocks the true potential of blockchain, allowing for seamless integration and communication across diverse networks. This capability is essential for creating a fully connected and efficient digital ecosystem, elevating blockchain from a niche innovation to a foundational technology that can support a wide range of applications and services.


Without interoperability, blockchain technology risks remaining siloed and underutilized. It's interoperability that unlocks the true potential of blockchain, allowing for seamless integration and communication across diverse networks. This capability is essential for creating a fully connected and efficient digital ecosystem, elevating blockchain from a niche innovation to a foundational technology that can support a wide range of applications and services


Why Interoperability Matters


Interoperability in blockchain technology brings several key benefits that enhance the overall ecosystem:


  • Reduces Transaction Times and Costs: By eliminating the need for multiple transactions across different networks, interoperability streamlines operations.

  • Fosters Innovation: It enables developers to create decentralized applications (dApps) that leverage the strengths of multiple blockchain networks.

  • Enhances User Experience: Users gain access to a broader range of services and assets across different blockchains, increasing market participation.

  • Improves Liquidity: Seamless asset exchange across networks simplifies buying and selling, enhancing liquidity.

  • Strengthens Resilience: The development of a more interconnected ecosystem reduces reliance on any single network, enhancing the blockchain infrastructure's resilience.

Avalanche and Interoperability


Avalanche is a prominent example of a blockchain project working towards enhancing interoperability, primarily through its innovative approach to subnets. Subnets on Avalanche are customizable blockchains tailored to specific applications or use cases. These subnets can have their own rules, validators, and tokens while still interacting seamlessly with the broader Avalanche network and other subnets. Additionally, Avalanche's bridging capabilities enable direct asset transfers between its primary chains and other blockchains, further enhancing interoperability. 


Citi leveraged Ava Labs' AvaCloud, deploying blockchain technology on the Avalanche platform to experiment with an interoperable application that executed simulated bilateral spot foreign exchange trades. This initiative serves as a significant milestone, showcasing the practical and transformative potential of blockchain interoperability within the financial industry. It highlights a shift towards a future where financial transactions are seamlessly integrated, more efficient, and globally accessible, merging traditional finance with blockchain's innovative capabilities.




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