Tombolo: Towards a Decentralized Interconnected Blockchain Ecosystem using Cross-Chain Payment Channels

Abstract

The world of finance and decentralized applications has undergone a revolution with the advent of blockchain technology, resulting in the emergence of various blockchain platforms. This underscores the necessity for conducting exchanges between different blockchains to facilitate blockchain interoperability. However, the challenges linked to the scalability of individual blockchains pose negative implications during inter-chain exchanges. A prominent solution to tackle the scalability challenge in a blockchain, particularly in terms of throughput, is a Payment Channel Network. However, creating such a solution for facilitating inter-blockchain exchange presents significant challenges, as it demands atomic state updating on two different blockchains. In this paper, we introduce a novel, fully distributed mechanism for establishing cross-chain payment channels (CCPC), designated as Tombolo protocol, designed to operate seamlessly across different blockchains. Furthermore, we provided the sequence of steps that the user should follow to facilitate further exchange without contacting either of the involved blockchains. Additionally, we showcase its resilience against malicious behaviour, specifically in situations where a participant attempts to close the channel using an outdated state or becomes inactive during exchanges. Furthermore, we have demonstrated the viability of Tombolo by implementing it on an Ethereum Virtual Machine-based blockchain using Solidity v0.8.0 based smart contracts. Through comprehensive experimentation and evaluation, we illustrate that CCPC can be established with approximately 2.5 times the gas utilization and around twice the time overhead compared to Raiden, a state-of-the-art intra-chain channel.