Blockchain, Cryptocurrency

Blockchain Interoperability: Exploring Purpose And Diverse Forms

By Stephen Carter


Reviewed by: Stephen Carter


Blockchain Interoperability

The blockchain network has now developed to such an extent that it is now like a cobweb so fiercely intertwined.

There are thousands of level 1 blockchains and level 2 and level 3 chains built on them. Interactions between the blockchains have become more necessary now.

How does cross chain interactions and data exchange happen between different blockchains?

Here comes the role of blockchain interoperability.

In this article you will read more about blockchain interoperability, its role in making advanced cross chain communication possible and the different types of blockchain interoperability.

What is Blockchain Interoperability?

Blockchain interoperability refers to the ability of different blockchains to interact with each other and share and receive data in a hassle-free manner.

Interoperability is important for the creation of decentralised applications (dApps) that can connect and operate with smart contracts of different blockchains.

Blockchain Interoperability

Blockchain interoperability is important for innovations and development of blockchains as it necessitates that the chains adopt a certain set of features that make them compatible to all use cases.

What is the Role of Blockchain Interoperability?

Blockchain interoperability enables more secure data transfer in a cost-effective manner. It is beneficial for the development of the entire network in many ways.


Interoperability enhances scalability when two or more different chains with varied use cases are synchronised together for a single user or purpose.

New Use Cases

Interoperability means you can combine different chains to build applications that cater to new use cases.

Interoperability increases the opportunity of decentralised finance (defi), asset tokenization without compromising on liquidity of the blockchains, expansion of digital currencies, growth of the gaming industry, innovations in supply chain management, etc.

Larger User Base

Interoperability means more use cases, which will in turn increase the user base.

Users will now be able to connect with multiple dApps, transfer data and money across chains, all with just one log in.

Interoperability increases the customer satisfaction and user friendliness of the blockchain network.

Blockchain interoperability has a crucial role in facilitating the advanced transactions in this digitalised world.

The users can scale their businesses across all terrains with comparably less cost and effort.

Types of Blockchain Interoperability

Blockchain interoperability is a complex phenomenon that includes integrating different consensus agreements to facilitate a common cause.

There are different types of blockchain interoperability solutions categorised based on the net effect that it provides to the users.

Token Swaps

Each blockchain network has its own native token which is solely used by that particular platform to conduct transactions.

With interoperability, it is now possible that you make the transaction using a coin and the receiver receives it in another coin of their choice.

Token swap is enabled from the common liquidity pool where interoperable blockchains have their coins.

Token Bridges

With token bridges, you can lock and burn coins on a chain and unlock and mint them on another chain.

Token bridges are divided into various types as given below:

  1. Lock and Mint Token Bridges
  2. Burn and Mint Token Bridges
  3. Lock and Unlock Token Bridges

Native Payments

Native payment refers to the ability to trigger a transaction on a destination chain using the native currency of the source chain

Payments and transactions on any blockchain is possible if you have access to payments on a blockchain compatible with that.

Contract Calls

Contract calls is the facility where a smart contract on the source chain can make calls with the smart contract of another chain to exchange information.
Contract calls are necessary for the onset of token swaps and token bridges.

Programmable Token Bridges

Users can programme the token bridges in such a way that when the transaction on a source chain is initiated and the token has been received by the destination chain, a contract call is executed between the two smart contracts. This facility is useful to customise the interchain activities.

The Bottom Line

Blockchain interoperability is the need of the hour with the emergence of new chains and the online business becoming largely dependent on the network.

It is necessary to scale up cost effective, secure and utilitarian solutions to the problems that users encounter during cross chain interactions.

Stephen Carter

Stephen Carter is a software technology expert. He writes about market research on various hot topics like cryptocurrencies, explaining how they started. He's good at making complicated tech ideas easy to understand for everyone.

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