In the early days of crypto, transferring funds was a simple task. There was one cryptocurrency and one blockchain, Bitcoin. Then, along came the Ethereum network. It solved various problems inherent with the BTC blockchain but also added additional challenges and an entirely new layer of complexity – interoperability.
Ether (ETH) couldn’t be stored on the Bitcoin blockchain, and vice versa. Most of these initial BTC to ETH trades had to be done person-to-person through OTC (over the counter) deals. This was eventually solved through the use of wrapped tokens on the Ethereum blockchain. However, this was just a short-term solution to a much larger problem.
Today, there are hundreds of blockchains, thousands of coins, and millions of people wanting to trade, stake, earn, short, hold, and spend all at the same time. Unfortunately, the current environment makes this process considerably more complicated when multiple blockchains are involved. The complexity of cross-chain transactions has multiplied exponentially and DEXs still wrestle with this thorny issue.
The Ethereum Virtual Machine
The development of Ethereum introduced the world to EVM or the Ethereum Virtual Machine. This technology is responsible for much of what powers Ethereum and other EVM-compatible blockchains. Ultimately, it provides the infrastructure for smart contracts and the framework developers need to build on EVM blockchains.
When entrepreneurs and programmers began creating new tokens, projects, and even blockchains, it made sense to build on the existing EVM instead of reinventing the wheel.
This led to a category of tokens and blockchains that are known as either EVM or ERC-20 compatible. This has allowed a certain level of interoperability to exist with the help of cryptocurrency bridges. It has also provided a baseline for projects such as Sifchain to innovate and expand on the limited capabilities of current cross-chain communication.
Peggy 1.0 to the Rescue
Sifchain has been addressing the problem of cross-chain incompatibility since 2020. The first iteration of their Peggy code made it possible to trade, move, and store a wide selection of EVM-compatible tokens on the Sifchain DEX. Peggy 1.0 made it possible to easily import and export a wide selection of ERC-20 tokens, including ETH, between the Sifchain and Ethereum blockchains.
Sifchain is a member of the Cosmos ecosystem. The project chose the Cosmos SDK to develop Peggy because of its low network fees, speed, and focus on the cross-chain transmission of data. Sifchain is a Cosmos-IBC enabled project, which connects them to the Cosmos family of 39+ chains. Cosmos-IBC enabled chains can easily transfer assets, meaning that chains that bridge into Cosmos can have their tokens shared across up to 40 chains through one bridge.
Establishing Universal Compatibility
Ideally, everyone would like to go to one place to trade across blockchains without the risk of losing value, having to make multiple transactions to buy a single token, or spending a fortune on network fees.
Sifchain’s end goal for Omni-EVM looks to make this a reality. Rather than being limited to certain ecosystems and blockchains, Omni-EVM aims to provide a way for EVM-based projects to integrate with Sifchain and other connected platforms. It does this through the power of Peggy 2.0.
Introducing Peggy 2.0
Peggy 2.0, or the next iteration of their original Peggy technology, is the bridge technology code Sifchain is developing to bring true interoperability to blockchains. One of the drawbacks to mainstream adoption is complexity and lack of user-friendliness. Someone who isn’t a crypto specialist may find it difficult to deal with ideas such as ‘wrapped’ coins and blockchain incompatibility.
In a perfect world, end users shouldn’t have to worry about any of this. If you have tokens you want to trade or move across chains, you should be able to do it in a few mouse clicks and with complete confidence that the value of your coins will be fully preserved.
Peggy 2.0 provides the backbone and underlying technology for Sifchain to be a hub of Omni-EVM transactions. The innovative solution offers projects a way to connect their platform and tokens easily & quickly to Sifchain, which will also be connected to numerous other EVM-compatible platforms. This eliminates the need for navigation through other third-party bridges and platforms, providing a streamlined approach for both developers and users.
It also takes care of another problem – sporadic token valuations.
Omni-EVM and Mainstream Adoption
Long-term, mainstream adoption is predicated upon ease of use and that is exactly what the IBC protocol and Omni-EVM promise to achieve. Eventually, every end user will be able to trade, move, store, and engage in any other financial activity without having to think about blockchain compatibility. Ultimately, this will open the doors for true mainstream adoption, lowering the barrier of entry for the billions of potential cryptocurrency users across the world.