Since the first decentralized blockchain was created in 2008, this industry has seen incredible progress and rapid growth. The industry has since expanded to boast over 1,000 distinct blockchain networks today.
As post-Bitcoin blockchains have become more and more complex, global spending has also started to rise. Each year, billions of dollars are poured into decentralized technology, hoping to forge the applications and use cases of the future. With present and conservative estimations, global spending on blockchain solutions is set to reach a total of $19 billion in 2024.
Despite technological leaps and a continual flow of capital into this world, the blockchain technology hasn’t achieved the level of adoption that one would expect. There are a number of culprits to blame here, stretching from a lack of public education to the scalability problems that a number of leading blockchains have to contend with.
Another common concern that many discuss when looking at blockchain is the lack of interoperability across distinct ecosystems. In this article, we’ll dive into the interoperability problem, outlining why it’s putting a stop to the mass adoption of blockchain and how one innovative multichain protocol is set to change the face of this industry.
The Interoperability Problem
Blockchain has come a long way over the past decade, evolving from a rudimentary system into a worldwide financial pioneer with nearly $60 billion in total value locked (TVL).
While many blockchains excel in one or two areas, they cannot cover absolutely all the bases. For example, Bitcoin has phenomenal security but it lacks scalability. Bitcoin has a notoriously low transaction per second (TPS) count. Despite its growing popularity, it has failed to keep up, leading to long transaction queues.
A similar problem is seen with Ethereum, the world’s second most popular blockchain. Although Ethereum is wonderful for supporting developers and allowing them to create Web3 and DeFi projects, it also suffers from the scalability problem, which is why we have seen the proliferation of Layer-2 networks. Ethereum is currently in the process of boosting its transaction speed and is moving in the right direction. But “The Surge” upgrade that will make the Ethereum network capable of handing over 100,000 transactions per second is still a long time away.
Due to relatively low transaction speed in combination with a high developer and user count, Ethereum has suffered from long transaction queues. To push transactions forward, they allow users to pay a gas fee, which makes many Web3 pursuits unstainable due to the wildly varying gas fees and the instability of the system.
For a developer, selecting a blockchain is a dance of pros and cons. If you want the developer tools that Ethereum provides, you need to expect additional gas fees. Equally, if you want the security that Bitcoin offers, you’re going to suffer from an inflexible environment.
Users similarly run into problems when selecting the blockchain to transact on or to HODL their assets. When choosing a chain, there is an expectation that it survives in the long run and continues to generate a return for investors. The instability of certain blockchain networks cannot guarantee this, which scares some investors away from allocating funds to them. Simply put, they fear that their assets may be, one-day, tied to a dead blockchain system.
Without interoperability across different blockchains, there are too many variables to make this a stable environment – both for investment and development. It’s no wonder that Web3 and the Metaverse have suffered with low adoption rates, considering the very technological foundations upon which they are built still unnerve many people.
However, the past years have given organizations time to plan, research, and develop solutions. Most recently, Pantos, a project backed by Bitpanda, is catching media attention due to its ingenious proposal to fix the interoperability problem.
The Pantos Multichain Protocol and the Future of Blockchain
Pantos has been under development for about five years, with the team beginning their research in 2018. Over the years, they followed the expanding capabilities of blockchain, while taking note of the unique problems that this ecosystem was suffering from. Focusing on the lack of interoperability, they designed a Multichain Token Standard named PANDAS (Pantos Digital Asset Standard).
It establishes a previously non-existent standard for blockchain interoperability, allowing the movement of assets from one chain to another with ease. Beyond just facilitating this movement, Pantos does so without compromising the trustless and decentralized manner with which blockchain works, allowing developers to achieve multichain development without compromising on their ideals and targets.
Once developers and users have the ability to move assets across different chains, the potential for expansion of this entire industry grows even more. Users won’t have to worry about their assets being stuck on a dying chain. Equally, developers can choose the best elements of different chains without having to suffer the consequences of devoting their entire project to a single blockchain ecosystem.
Pantos represents a revolutionary step in the evolution of the industry, allowing it to overcome the central barriers to adoption. With the interoperability problem removed from the equation, DeFi and Web3 are set to explode in usability, functionality, and user uptake.
With Pantos’ ability to allow developers to create and deploy multichain tokens, this protocol represents an innovative step towards a truly multichain future.
As blockchain developers, users, and investors are afforded more flexibility with Pantos, everyone is able to take advantage of the very best of what each ecosystem has to offer. Instead of being locked into one system – and having to work with all its unique disadvantages – Pantos creates a Multichain technology.
With the impressive speed with which Pantos is gaining traction, we’re likely to see the project at the forefront of Web3 infrastructural development over the next few years.