This article was first published on POA Network - Medium
Over the last few months, we have been working hard on a new interoperability protocol design. Since launching the original POA20 Bridge on May 2018, POA has been continuously improving and expanding the technology to explore new use cases for the TokenBridge. Interoperability is at the core of everything we do in POA Network, and today we’d like to discuss our latest interop development: the Ethereum to Binance Chain Bridge (ERC20 — BEP2 bridge).
Binance Chain is a blockchain software system developed by Binance and its community. It is a blockchain which currently houses Binance DEX, a decentralized exchange with features developed on top of Binance Chain. Using the new chain, you can issue tokens to digitize assets and use the network to exchange and transfer assets. Binance DEX is home to many bridged assets from Ethereum, and with BEP3 (Binance Evolution Proposal 3), Binance is already preparing for bridge-based transfer. According to the Binance github repo on Bep3:
“Binance Chain serves fast transferring transactions and also high capacity asset Exchange, which have benefits a lot assets issues on it. However, there are major cases Binance Chain itself cannot satisfy:
- Assets have complicated token economies themselves, such as DeFi.
- Assets serve as native tokens on other blockchains.
For these tokens, the best way to use Binance Chain is to spread the tokens on multiple chains. One can issue or peg part of total token supply on Binance Chain to enjoy the speed, fast finality and powerful exchange, meanwhile keep other benefit and necessity on other chains. Many new requirements are imposed for such model:
- there should be an easy way for users to swap unidirectionally or bidirectionally between Binance Chain and the other chain, better in a trustless way;
- there should be restrictions and/or transparency to ensure the total supply of tokens remained the same, ...
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POA Network - Medium