Challenges of Cross-Chain Interoperability and Innovations of the ERC-7683 Standard

In the multi-chain landscape of blockchain, achieving secure and convenient cross-chain interoperability has always been a significant challenge faced by the industry. As the demand for cross-chain transactions among users grows, these challenges become more pronounced.

Main Challenges

security

Security issues are the most critical challenge in cross-chain transactions. Cross-chain bridge protocols that can attract a large amount of assets often become the primary target for hackers. Cross-chain bridges rely on trusted third-party validators to process transactions; if the number of validators is insufficient or the trust model is too centralized, hackers may attack the validators to compromise the cross-chain bridge and steal assets. Additionally, vulnerabilities in the protocols' own contracts often serve as entry points for attacks.

In August 2024, a certain cross-chain bridge was suspected to have been attacked, resulting in a loss of approximately 12 million dollars. In March 2022, the bridge had previously experienced a larger scale security incident, causing losses exceeding 600 million dollars.

high Gas fees

Cross-chain transactions typically incur higher Gas fees because users need to pay the operation fees on both chains simultaneously.

Complexity of Operation

Each blockchain network has its own independent operating mechanisms and protocols, which leads to complex and cumbersome operations when users transfer assets and data across chains. Users who trade frequently may also encounter issues with asset price slippage.

ERC-7683 Standard: Innovative Solutions

In response to the aforementioned challenges, in May 2024, several leading industry institutions jointly proposed the ERC-7683 standard, aimed at simplifying cross-chain transaction processes through a shared execution network.

core technology

ERC-7683 is created based on the CrossChainOrder structure, providing the ISettlementContract smart contract interface to implement a standard API for cross-chain transaction execution systems. Its core idea is to ensure that all "cross-chain intentions" follow a unified order structure, significantly enhancing the flexibility of cross-chain operations and user-friendliness.

Application Progress

In August 2024, a certain Layer 2 solution announced the adoption of the ERC-7683 standard to improve the transfer efficiency of ETH and USDC in its ecosystem. Several well-known projects also stated that they would adopt this standard in cross-chain collaborations.

potential challenges

Although the ERC-7683 standard can provide a consistent user experience, it still faces challenges in obtaining sufficient cross-chain liquidity. The successful implementation of the standard requires the formation of a network effect to attract more use cases and user participation to ensure that there are enough "Fillers" to support users' cross-chain needs.

Industry Support

The co-founder of Ethereum expressed support for the ERC-7683 standard, emphasizing its potential in simplifying cross-chain operations. He pointed out that users can easily achieve cross-chain asset transfers through simple operations.

Outlook

The multi-chain architecture is an inevitable trend in the Web3 era. The ERC-7683 standard directly addresses the pain points of cross-chain transactions and is expected to significantly enhance interoperability between blockchains. Its application will bring profound impacts to the blockchain world, especially in improving user experience and injecting more liquidity into DeFi projects. With the promotion of the standard, we can expect to see more innovative applications and rapid development of ecosystems.