From scalability to cross-chain DeFi

Abstract

A few years ago, scalability seemed to be the greatest challenge in the development of the blockchain space. But the challenge has subsided since new ecosystems have opted for different consensus mechanisms to solve the problem. Yet, various new ecosystems emerged separately and independently. The resulting silos are not the interconnected world which is often envisioned as the future of the internet. Therefore, the importance of cross-chain infrastructure and applications became increasingly obvious. In this article, the current landscape of DLT interconnectivity, what it can enable and what the future might hold are presented from a practitioner’s view. A special focus is placed on the phenomenon of decentralized finance, cross-chain contracts and layer-2 solutions.