Ayush Singh
Solana IBC Connection

Solana IBC Connection

Ayush Singh's photo
Ayush Singh
·

4 min read

What is IBC?

The Inter-Blockchain Communication Protocol (IBC) is a protocol to handle authentication and transport of data between two blockchains.

IBC is a protocol for communication between Blockchains within the same ecosystem (e.g. within the Cosmos ecosystem), whereas cross-chain bridges are used to connect two different Blockchain ecosystems (e.g. Ethereum and Binance Smart Chain).

Picasso will fuel the Solana IBC, adding to the cross-ecosystem IBC hub alongside Polkadot, Kusama, Cosmos, and soon Ethereum. Upon establishing this connection, we've identified compelling use-cases and are actively seeking early collaborators and teams eager to explore innovative possibilities.

As Solana collaborates with Polkadot, Cosmos, Kusama, and Ethereum, the value generated from IBC transfer activity will benefit $PICA token holders.

Solana IBC

  1. IBC Protocol Implementation: Composable is actively working on implementing the Inter-Blockchain Communication (IBC) protocol on Solana, creating trust-minimized connections with Ethereum, Cosmos, and Polkadot. This achievement marks a significant breakthrough, overcoming technical challenges previously deemed insurmountable.

  2. IBC Compatibility Mechanism: Initially thought to be incompatible with IBC, Solana and other chains like TRON and NEAR are now made capable of supporting IBC through a mechanism developed by Composable in collaboration with the University of Lisbon. The mechanism, initially deployed on Solana, is planned for expansion to other networks in the future.

  3. Restaking Introduction on Solana: The Solana IBC connection introduces restaking on the Solana network for the first time. Restaking, a concept popular in the Ethereum community, involves staking assets with validators using liquid staked and receipt tokens. This not only boosts DeFi yield but also enhances overall security. The restaking layer on Solana will be incentivized through a team staking competition designed for the restaking vaults.

Adding Solana to Picasso's list

  1. IBC Compatibility Breakthrough: Solana, TRON, NEAR, and other previously incompatible chains can now connect to the Inter-Blockchain Communication (IBC) protocol, thanks to a mechanism developed by Composable in collaboration with the University of Lisbon.

  2. Solana's Gateway via Picasso: Composable is initially deploying this compatibility mechanism for Solana, enabling the massive usership and liquidity of the Solana network to flow seamlessly into other IBC-connected chains and vice versa, all facilitated through the Picasso platform.

  3. Cross-Chain DeFi Expansion: The newfound compatibility opens doors for the development of cross-chain use cases, allowing Solana to interact with other ecosystems. This connection not only enhances liquidity across networks but also empowers users to navigate the cross-chain decentralized finance (DeFi) space with greater ease and flexibility.

    What potential DeFi uses could the ability to move these assets open for end users?

    Solana IBC Strengths and Impact:

    1. Solana's Unique Attributes:

      • Fast and Affordable Transactions: Solana is recognized for its high-speed and cost-effective transaction capabilities.

      • Massive Ecosystem: With a substantial user base and significant value, Solana stands out as a thriving blockchain ecosystem.

    2. Key Metrics as of October 30, 2023:

      • Total Value Locked (TVL): Solana DeFi protocols boast a TVL of $392 million, ranking Solana as the 7th largest blockchain by TVL.

      • SOL Token Market Cap: The native SOL token holds a market cap of approximately $14.7 billion, making it the 7th largest token by total market capitalization.

    3. Solana <> IBC Connection Benefits:

      • Cross-Chain Use Cases: The Solana <> IBC connection facilitates the implementation of diverse cross-chain use cases between Solana and other IBC-enabled chains like Cosmos, Polkadot, Kusama, and Ethereum.

      • Leveraging Solana's Strengths: Developers and users can harness Solana's speed, cost-effectiveness, and substantial liquidity and usership from other interconnected ecosystems.

    4. Wider DeFi Interconnected Space:

      • Picasso's Trustless (IBC): The Solana IBC connection on Picasso paves the way for other previously IBC-incompatible chains to join, enhancing the interconnectedness of the DeFi space.

      • Greater Opportunities: This innovation creates a more widely interconnected DeFi space, offering increased opportunities for all participants.

    5. Metrics Update as of December 7, 2023:

      • Increased TVL: Solana DeFi protocols experience growth, reaching a TVL of $712 million, maintaining its position as the 7th largest blockchain by TVL.

      • SOL Token Market Cap: The market cap of SOL has risen to approximately $27.3 billion, making it the 6th largest token by total market capitalization.

    6. Continued Cross-Chain Development:

      • New Use Cases: The Solana IBC connection fosters the development of novel cross-chain use cases between Solana and other ecosystems, enhancing the overall experience for users navigating the cross-chain DeFi space.