Composable IBC: Enabling an Interconnected Multi-Chain Future
By expanding IBC beyond the Cosmos, Composable opens the door for trust-minimized composability across any ecosystem and any chain!
It is more evident than ever that we are moving towards a multi-chain future. Frameworks like Polkadot’s Substrate and the Cosmos SDK have already successfully abstracted a large degree of the complexity associated with building app-specific L1s, giving birth to entirely new ecosystems during the last cycle.
Similarly, emerging L2 tech stacks like the OP Stack, the Polygon CDK or zkSync’s ZK Stack are now translating this concept to frameworks that increasingly lower the barriers of entry for builders that want to spin up (app-specific) rollups. Compared to app-chains, this comes with the benefit of not having to bootstrap and maintain a proprietary validator set (like an L1 outside of a shared security model would have to).
With maturing modular building blocks like alternative DA layers, shared sequencers and Rollup-as-a-Service providers that literally let you piece together your modular stack network configuration from a dropdown menu on a web UI in seconds, this trend is only going to accelerate.
The rollup narrative is also reflected in the data already. Ethereum L2s have undoubtedly gained a lot of traction over the last 12 months with Total Value Bridged (TVB) on L2 having grown over 304%, rising from USD 4.6B to roughly USD 14B over the course of only a year and during a bear market. L2Beat counts 32 existing L2s and 15 upcoming ones, which all ultimately verify state on Ethereum. This growth has been driven by an increasing number of projects both old (Alt-L1s) and new, which are opting for a L2 architecture instead of their own L1 or a smart contract based dApp on a generalized execution layer.
The vision outlined by Ethereum’s rollup-centric roadmap seems to be playing out well and a future of a more scalable Ethereum ecosystem has become increasingly more tangible.
However, the quickly increasing number of (app-specific) L1s and L2s also introduces novel challenges. An ever-growing number of L1 and L2 networks that compete for users and liquidity will lead to a fragmentation across all these different execution layers.
This leaves us with three core questions:
How can we maintain composability of applications built on different networks?
How can we enable a UX that abstracts the backend complexity of navigating all these different chains?
How can users transfer assets across these different networks in a trust-minimized manner?
The answer to all of them is Composable’s expansion of the Inter-Blockchain Communication protocol, a.k.a. IBC.
Let me explain.
Trust-minimized interoperability in the Cosmos and beyond
IBC is an open‐source protocol for relaying messages between independent distributed ledgers, and was created to connect independent blockchains to one another. It allows heterogeneous chains to exchange data and value through a system of light clients and relayers in a trust-minimized manner.
The three core components of IBC are:
IBC Protocol: Specifies the rules for communication between blockchains.
IBC Relayer: Responsible for monitoring events on connected chains, as well as constructing & dispatching IBC packets to the respective chains, thereby ensuring data delivery.
IBC Light Clients: Track the consensus state of other blockchains and have the proof spec necessary to verify the proof against the client’s consensus state. They use block headers to confirm the latest consensus state rather than executing and storing the block data & state.
IBC creates channels between two chains, which ensure the secure flow of data and tokens (in the form of packets) across these connections. Using light nodes to verify that the message (data or tokens being transferred) relayed by the relayer are valid & final on the source chain before allowing them to be transferred to the destination chain, IBC relies on each chain's consensus and validator set to ensure security & finality of cross-chain transactions.
This design makes IBC a highly secure interoperability protocol. Most generic message passing protocols introduce additional trust assumptions for users. This can mean trusting a multisig, a fraud proving mechanism, oracles or the validator set of a third-party chain to verify cross-chain messages and ensure their validity. With IBC, there is no third-party involved and users only trust the validator sets of the chains that they aim to interact with in the first place. Users only trust the code, making this what is referred to as a trust-minimized interoperability solution.
Composable is bringing IBC to Ethereum and L2s
IBC is very flexible and can theoretically support any chain with deterministic finality. Integrating with Ethereum and its ecosystem of L2s however, has been historically difficult. Before Ethereum's switch to Proof of Stake (PoS), creating a light client for Proof of Work (PoW) Ethereum was challenging due to PoW's resource-intensive design, the large block sizes, and non-deterministic finality.
However, with the transition to PoS and Composable’s advances in developing light clients for creating a Casper light client for Ethereum, this is set to change!
Our Casper light client will be deployed on the Composable Cosmos chain (which is planned to become an ICS consumer chain), and relies on the Sync Committee for block validation. Additionally, Composable is implementing a Tendermint light client in the form of a smart contract on Ethereum. The Tendermint light client is responsible for verifying the validity of block headers from Composable’s Cosmos chain and ensuring that the consensus state of the source blockchain is consistent with the header being presented. These headers contain data such as block hashes, timestamps, and state roots.
Verifying all the signatures of the Composable Cosmos chain directly would not be feasible for a smart contract on Ethereum though. To enable the Ethereum-based light client to verify message validity, ZK-SNARKs are used to verify the signatures of the Composable Cosmos chain’s validator set efficiently on Ethereum in the form of a succinct proof. Thereby, Composable is finally able to make Composable’s vision of a trust-minimzed IBC expansion to Ethereum a reality!
For more on the specific benefits of IBC on Ethereum for protocols, users and developers, check Composable’s extensive blog post from September!
How IBC everywhere will change the game
By implementing Composable’s Solidity-based Tendermint light client across the myriad of EVM rollups that exist out there in the future (or leverage native communication between L1 and L2), Composable can connect Ethereum and its ecosystem of rollups across tech stacks and ecosystems to Polkadot, the Cosmos and beyond in a fully trust-minimzed way!
This IBC expansion will make it increasingly difficult for trusted, more centralized interoperability / bridge designs to compete. As IBC support extends beyond the Cosmos, enabling trust-minimized interoperability, the network effects will increase. Additionally, the acceptance for additional trust assumptions (such as the ones introduced by most other GMPs) might decrease among users.
What’s also important is that IBC can transfer arbitrary data. This means that IBC can not only transfer value across networks, but also cross-chain user interactions and smart contract calls. This enables cross-chain applications that don’t compromise on trust and that allow for a seamless UX for users that can interact across a unified (because IBC-interoperable) backend of chains.
IBC will make the previously siloed ecosystems of Ethereum and its L2s, Polkadot and its parachains and the Cosmos one big interconnected universe of composable networks and applications. Users will be able to seamlessly transfer funds from network to network, swap assets across chains or even undertake on complex cross-chain interactions such as taking out a loan on chain B with collateral on chain A.
Aside Ethereum (and Polkadot, see below), Composable is also expanding IBC to Near and soon Solana, further bolstering the potentially powerful network effects around IBC as a widely adopted standard for secure cross-chain message passing, on top of which a seamless intent-based cross-chain UX that is ready for mass adoption finally becomes possible.
Last but not least, Composable’s IBC-enabled interoperability framework also includes Picasso, a Substrate-based Kusama parachain that acts as an interoperability hub connecting Polkadot to the Cosmos and beyond (e.g. Near) through IBC. Picasso is the only CosmWasm and IBC-enabled parachain and thanks to XCMP is also able to communicate securely with other Substrate-based chains. Learn more about Picasso here.
Testnet is Live!
The Ethereum Inter-Blockchain Communication (IBC) testnet is now live! Join Phase 1 as a Picasso Pioneer to earn rewards, gear up for Mainnet Squads, and showcase your skills in DeFi. Engage in testnet missions, climb the leaderboard, and earn rewards! This testnet launch is a significant advancement in cross-chain communication and allows users to seamlessly connect using MetaMask and Keplr wallets. Start your first cross-chain mission and transfer native PICA tokens between Ethereum and Cosmos via IBC! Join us in exploring this new frontier and experience firsthand the enhanced capabilities of Composable’s platform. The future of interconnected blockchain technology is here, and we're at the forefront of it!
That’s a wrap for today! Stay tuned for another blog post next week, exploring Composable’s key role as an interoperable cross-chain settlement layer for user intents and what role IBC plays in that!