What Is Posschain and Why It Is Important?
Let’s start by explaining what blockchain and cross-chain are. A blockchain is a network in which one block of transactions sequentially follows another, and the network is backed by miners/nodes.
The first blockchain is the Bitcoin blockchain; many other blockchains have been created since its launch. A significant milestone in the development of blockchain technology was the launch of the Ethereum network with support for smart contracts. Smart contracts are the technology powering all DEX, DeFi, NFT, GameFi, Multichain, and Cross-chain projects.
Cross-chain is a tool that connects different blockchains and allows you to transfer assets between them.
How does cross-chain work?
Here we come to the critical point — how does cross-chain interoperability work?
Cross-chain interoperability is possible for any blockchain that supports smart contracts. For example, the most popular Ethereum token standard ERC20, BSC BEP20, HECO HRC20, Posschain, and most blockchains use the Solidity programming language.
Users can transfer assets between different networks, and developers can create multi-chain DApps as blockchains support common development standards.
Each blockchain operates separately and independently, and cross-chain bridges connect these ecosystems, empowering users and projects.
If blockchains work independently, how are tokens transferred between them? Well… technically, there are no transfers between networks, just blockchains that change the state of being. Sound complicated? Let’s break it down in detail using the example of transferring BNB from the BSC network to the Posschain network.
Let’s say you decide to transfer BNB from the BSC network to the Posschain network: you use the chain bridge, select the networks, determine the amount of BNB, and enter the recipient’s wallet address.
After the transfer, the smart contract of the cross-chain bridge locks your BNB to the BSC network. The information about the number of locked BNB and the recipient’s wallet address is transmitted to the Posschain network via the oracle of the bridge. After that, the bridge’s smart contract on the Posschain network unlocks the same amount of BNB and sends them to the specified wallet on the Posschain network. All this happens automatically.
Oracle is a tool for transferring data to the blockchain. Since the blockchain is a closed ecosystem, information from outside does not flow directly into it. Oracle projects are essential for correctly functioning intelligent contracts such as cross-chain transfers.
Why is the cross-chain important?
Transferring assets across chains dramatically increases the value of these assets because they can be used in more scenarios and provide greater efficiency.
The current blockchain trend is compatibility. You have to integrate with other popular chains to become more popular. With the DeFi boom, you can no longer build closed ecosystems. CEXs are still a popular option for trading, but DEXs like PancakeSwap, Uniswap, and others are already more significant than many centralized exchanges. A wide variety of DeFi protocols yield more profits than most conventional banking and CEX solutions.
Popular DeFi protocols are multi-chain. They offer great products on various chains to enable their users to benefit from these ecosystems. Cross-chain and multi-chain are significant trends in the blockchain industry as it creates an internet of blockchains where most of the networks can be compatible with each other in a truly decentralized way without intermediaries.
Posschain will achieve a lot in cross-chain compatibility, making it one of the most user-friendly blockchains for users and developers. Its upcoming release will become more readily available — DApp portability from BSC, Ethereum, HECO and more.