Key Concepts
Chain abstraction refers to the idea of simplifying the use of blockchain applications and services by removing barriers and technical processes from the user experience.
Chain abstraction can make applications more appealing to end users and help developers build more effective decentralized applications that allow for cross-chain interactions.
Chain abstraction faces challenges in the form of centralization risks, security risks, and potential operational compatibility issues.
Introduction
Blockchain interactions can often be confusing and difficult, especially for new users. In this article, we will explore the concept of chain abstraction, how it works, some of its advantages and challenges, and common misconceptions about it.
What is chain abstraction?
Chain abstraction is the NEAR protocol's idea of simplifying how users interact with blockchain technology by separating it from the user experience (UX). The goal is for users not to be aware of the specific blockchain they are interacting with or even to realize that they are using a blockchain at all.
How does chain abstraction work?
Efficiency
Imagine if you could only send messages from one iPhone to another iPhone but not to Android phones; that would be inefficient and impractical. Similarly, users should be able to interact with decentralized applications (DApps) across different blockchains without unnecessary barriers.
The goal of chain abstraction is to remove or hide the complexities of blockchain technology, allowing users to focus on the functionalities and benefits of the decentralized applications they use. For example, if "Sarah" wanted to use a new decentralized application called "S", she shouldn’t have to wonder about the blockchain on which this application is built. From the user's perspective, all she wants is for the application to work well and fulfill its purpose.
Similarly, millions of people use the internet every day, but only a tiny fraction of them understand the technology it is built on and how it works. As long as it works as intended and adds value to users, there is no reason for the average user to fully understand the technical details.
Transactions
Imagine using a decentralized application that allows you to easily conduct transactions across multiple networks and navigate between different services. For example, imagine Sarah opened app "S" on her phone, ordered a cup of coffee, and found a discount at her favorite clothing store. She bought a pair of shoes and earned rewards stored as non-fungible tokens (NFTs) on the Ethereum network. Later, she noticed a special offer related to her reward and purchased tickets for an event, which were also NFTs, but on the Binance Smart Chain (BSC).
All of these transactions can occur in a single application, eliminating the need for "Sarah" to manage multiple wallets, switch networks, or directly handle transaction fees herself. This level of cross-chain interaction is the ultimate goal of chain abstraction.
Advantages of Chain Abstraction
Liquidity Fragmentation
Liquidity is often isolated within specific blockchains, making it difficult for users and developers to access and utilize it. Chain abstraction addresses this by enabling access to liquidity across various blockchains.
Imagine that "John" wants to lend his tokens to earn interest. If liquidity is isolated, he will need to find a platform on the specific blockchain where his tokens reside. But with chain abstraction, "John" can lend his tokens on a platform that pools liquidity from multiple blockchains. This could lead to an increase in the number of users on the platform and more competitive interest rates for "John".
Simplifying Development
Chain abstraction provides developers with the flexibility to build decentralized applications without being constrained by specific blockchain limitations.
A developer might use the Ethereum network due to its smart contract capabilities while using Polygon due to its low costs. For example, Decentraland uses the Polygon network to allow its users to claim, buy, sell, and trade wearables for their avatars without transaction fees. It’s important to note that Decentraland utilizes multiple features to eliminate fees entirely. Transactions on Polygon incur nominal fees but are not completely free.
Challenges of Chain Abstraction
Centralization Risks
Chain abstraction can be implemented by creating an interface that allows users to interact with all types of blockchain applications from a single place, enhancing the user experience. However, there are concerns that this interface could become a single point of failure.
Security Risks
Each blockchain has its own security protocols. When integrated into a single interface, ensuring that all security measures are maintained becomes challenging. If these measures are not applied carefully, the new interface for chain abstraction could pose risks to individual blockchains.
Operational Compatibility Issues
Another challenge is ensuring operational compatibility across different blockchains. Different blockchains have unique consensus algorithms and smart contract languages, making it difficult to create a single interface that works seamlessly across all networks. For instance, a smart contract written for the Ethereum network is not directly compatible with the Solana network due to differences in programming languages and underlying technologies.
Common Misconceptions About Chain Abstraction
Chain abstraction removes the differences between blockchains
While chain abstraction simplifies interactions between chains, the unique features of each blockchain remain intact. Chain abstraction streamlines technical processes and automates them to enhance the user experience, but it does not directly alter the blockchain infrastructures.
Chain abstraction relates to transactions across chains only
Facilitating transactions across different blockchains is one of the important features of chain abstraction, but it is not its only use. Chain abstraction also includes simplifying the use of decentralized applications, deploying smart contracts, and retrieving data across blockchains.
Closing Thoughts
Chain abstraction refers to simplifying interactions across different blockchain networks. The advantages of chain abstraction include liquidity fragmentation and simplifying development. It faces challenges in the form of centralization and security risks, as well as potential operational compatibility issues. However, it can pave the way for interoperable and user-friendly blockchain ecosystems.