The Problem with Blockchain and How We’re Fixing It

date_range November 25, 2021
person Miriam
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Crypto, at the moment, is a fragmented system that simply grows more divided as more coins, tokens, apps, services, DeFi, GameFi, NFTs enter the scene with hardly anything to unite them all aside from a common form of technology, namely, blockchain, and a few exchanges where you can trade coins.

The current crypto situation is like if you had to choose one store to shop at based on the money in your wallet — Target or Walmart, not both. Say there’s a sale at Target you want to access. If regular shopping functioned like crypto currently does, you would have to go through a lengthy process riddled with fees to transfer your tokens to Target. And, at the end of the day, you probably wouldn’t think it’s worth going through this process just for the sale prices. 

You might decide to transfer your tokens if Target offered a unique service that you couldn’t access from Walmart. The transfer process might be worthwhile in this case, but it’s certainly not simple.

In reality, of course, conventional shopping is not fragmented or complex, because our stores all accept the same currencies. This way we achieve interoperability across the market, and people can shop around without really caring which store they are buying from as long as they get the best product for the best price. 

Read on to discover how we are fixing the major problem with blockchain by creating a reality of blockchain interoperability.

bridge

The problem:

Before we describe the solution, let’s understand the number one reality that is holding blockchain technology back from mass adoption. This problem is fragmentation. The blockchain ecosystem is in its essence fragmented. Each blockchain is its own internal system with its own unique protocols, governance rules, and functionalities. While the divided nature of blockchains is in part what makes it decentralized and beneficial, creating user-friendly cross-chain bridges will be necessary before users can maximize their assets across chains. Bridging blockchains is indeed the subject of much talk and the inspiration for many projects.

What are bridges?

Decentralized bridges are becoming a popular solution to the interoperability issue. Bridges use smart contracts to burn or freeze your assets on the Bitcoin network and simultaneously mint them with an “Ethereum” wrapping on the Ethereum blockchain.

This process of course requires the communication of smart contracts across blockchains which is not always a safe environment for your assets.

Not all bridges are created equal

Say you hold BTC and you want to lend some out on Aave. What do you do?

Since Aave is hosted on Ethereum, and BTC exists on the Bitcoin blockchain, you are going to need to use bridges to wrap your BTC to be compatible with Ethereum.

Where do you start? Which bridge do you use? This seemingly simple task requires disproportionately extensive research, especially given that bridges have proven to be a weak link in the chain for hackers to breach.

Magic Square is partnering with deBridge to guide you 

There are a lot of “bridges” out there trying to unify the crypto space. The problem is that there are so many. Some are centralized. Some are not reputable. Some don’t provide much liquidity.

DeBridge is replacing the multitude of mediocre bridges with one powerful, decentralized bridge to provide the infrastructure for the interoperability of smart contracts, NFTs, arbitrary assets, and enable secure cross-chain swaps.  

So, Magic Square is implementing deBridge tech to allow users more utility across protocols, allowing you to access integrated DeFi within a given Magic Square app, maximize your assets across blockchains, and view cross-chain data with the click of a button. The process is so incredibly seamless that you won’t even know that deBridge is part of the picture.

A key piece of the Magic Square Puzzle

Of course, deBridge is only a piece of the Magic Square puzzle to create an ideal crypto user experience. Magic Square provides users with an integrated system including a one-click login across apps, a consolidated dashboard to view and open apps, and much more. Follow our blog for more updates, and be sure to join our social community.