Blockchain technology continues to revolutionize the financial sector, with the promise of transforming the way we manage assets and transactions. Tokenisation, the digital representation of assets and liabilities on a blockchain, is at the heart of this transformation. It introduces transparency, reduces friction in transactions, and offers new opportunities for innovation.
Citi estimated that the tokenisation market for global illiquid assets, from real estate to artwork, could reach nearly 10% of global GDP by 2030, amounting to approximately $16 trillion. This transformative process is reshaping the financial world and is considered a key driver for the mass adoption of blockchain technology.
However, a crucial challenge stands in the way of fully realizing the potential of tokenisation: interoperability. Different blockchains emerged in isolation, creating fragmented ecosystems with limited connectivity. Efficiently connecting these disparate platforms became a complex and costly endeavor, and this challenge had to be addressed to unleash the full potential of blockchain.
The Role of Blockchain Bridges
In recent years, blockchain bridges have emerged as a vital solution for overcoming the interoperability challenge. These bridges serve as connections that allow tokens to move from one blockchain to another. They consist of off-chain services and on-chain elements, enabling the transfer of digital assets and their associated information between different blockchains.
One remarkable solution for building secure and interoperable blockchain bridges is the Secure Asset Transfer Protocol (SATP) bridge, developed by Quant in collaboration with the Internet Engineering Task Force and the Massachusetts Institute of Technology. SATP bridges are known for their highly secure approach to connecting blockchains and using a standardized, compliant interface and data model, eliminating the need for custom implementations on each distributed ledger technology (DLT). Each SATP bridge has gateways connected to chosen DLT networks, open to authorized users, regardless of the integrated DLT.
Burn and Mint: A Secure Approach
The SATP bridges adopt the burn and mint technique, where only one version of a token can exist at any time. This method involves burning the original token on the origin chain while simultaneously minting a corresponding token on the destination chain, eliminating the need for an escrow address on the origin chain. This approach also mitigates the risk of a single point of attack by hackers.
The implementation of smart contracts within Overledger bridges, a part of Quant’s ecosystem, enhances transparency and security while allowing different DLTs to interact seamlessly. Overledger bridges work with various DLTs and networks, making them a versatile solution. They offer atomic asset transfer to prevent double spending and are auditable, allowing third parties to verify asset transfers and providing real-time confirmation of transfer phases.
The Advantages of Overledger Bridges
Overledger bridges provide several benefits, including:
- Interoperability: Overledger fosters collaboration between financial institutions and clients through standardized gateways.
- Ease of Use: No need for expert blockchain developers, as Overledger simplifies the process, reducing friction and enabling innovation.
- Security: Utilizing burn and mint design and secure messaging protocols, Overledger bridges prioritize security.
- Resilience: These bridges are built by experts with experience in critical national infrastructure and government.
- Programmability: Overledger bridges are designed to ensure the reliability and security of asset transfers.
- Future-Proof: Overledger ensures that digital assets remain secure and compatible with multiple blockchains in the present and the future.
Quant’s Approach to Interoperability
Quant, the creator of Overledger, has adopted a long-term and business-focused approach to bridges. They are confident that SATP bridges will have a significant impact, particularly when connecting two permissioned DLT networks, such as CBDCs or supply chain networks. SATP bridges offer a flexible solution for any organization connected to either network, making it easy to establish cross-chain connections.
The future of digital assets and blockchain bridges lies in the hands of innovative solutions like Overledger, driven by organizations like Quant. They prioritize simplicity, trust, and adaptability, enabling secure, scalable, and interconnected blockchain networks for the benefit of all participants.
Quant’s DNA: A Framework for Blockchain Success
Quant’s approach to bridging the blockchain gap is guided by several key principles:
- Interoperability Solved: Quant’s mission is to tackle blockchain interoperability and create networks that connect tokenized assets across different networks. They introduced ISO/TC 307 and developed Overledger, the first API gateway for accessing all blockchain networks.
- Ease of Use Out of the Box: Overledger offers a low-code, API-based, and enterprise-grade platform that simplifies application development and secure bridge creation across networks.
- Security Guaranteed: Quant prioritizes security with tamper-proof smart contracts validated by third-party experts.
- Resilience by Design: Quant’s leadership team brings experience in financial services, enterprises, and government, understanding the needs of regulated businesses.
- Programmability Embedded: Granular control over tokenized assets allows for future-proofing digital assets, making them smarter and more versatile.
- Adaptability Built In: Quant recognizes that the blockchain landscape is constantly evolving, and their solutions are designed to adapt to these changes.
With these principles at the core of their approach, Quant is leading the way in creating a best-practice framework for interoperability, enabling secure and seamless connections between blockchain networks.
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