IBC is Finally Landing on BSC
It’s fair to say that the Inter-Blockchain Communication (IBC) protocol is the most widely used, reliable, and universal interoperability protocol in the world to date. According to the Cosmos Chain registry, more than 100 zones have been connected via IBC. The IBC data dashboard demonstrates that the total value of IBC transfers between Jan 2022 and February 2023 reached $29B in value.
While it has taken a few years since its launch in 2021, the expansion of IBC to non-Cosmos SDK blockchains is accelerating, and it will become everywhere within a year because of the strong and huge community who work on making IBC standard.
In July, the first IBC connection between Cosmos appchains and Polkadot went live on the mainnet, largely thanks to the efforts of the Composable Finance team. The IBC adoption for Ethereum is also underway with multiple approaches: solutions using ZKP by Polymer Labs (zkMint), Electron Labs and Composable Finance, and solutions using TEE (Trusted Execution Environment) by TOKI. Additionally, Landslide is working on implementing a light client for Avalanche.
Needless to say, Informal Systems, Strangelove, Interchain Foundation and others have dedicatedly contributed to IBC’s core implementations, which are the foundation of the above initiatives.
Today, TOKI is excited to announce that IBC is finally landing on BSC (BNB Smart Chain). As many of you might know, according to DefiLlama, BSC is the third-largest blockchain network in the world by TVL. So, this represents a significant milestone for IBC.
Let’s dig into the details.
Here’s a comment about our work from Jack Zampolin:
Trust-minimized interoperability across blockchain ecosystems is greatly needed, and IBC is the clear front-runner for it. However, IBC is losing market share to dangerous centralized bridges, putting the whole crypto industry at risk. As such, it’s imperative that we intensify our efforts to promote IBC adoption. In this context, I’m greatly excited about the contributions from TOKI and Datachain, which are expanding IBC’s reach to non-Cosmos SDK chains such as Ethereum and BSC. I’m looking forward to seeing their ongoing contributions to IBC!
BSC Meets IBC
BNB Smart Chain (BSC) has finally gained the ability to communicate with other blockchains using IBC.
TOKI team, including Datachain, has contributed to IBC’s expansion since 2021. This includes the implementation of IBC-Solidity with two grants from the Interchain Foundation and various light client implementations for major enterprise blockchains such as Hyperledger Fabric and Corda.
To enable IBC on BSC, we primarily need the following modules:
- Light client for Parlia, BSC’s consensus engine
- IBC-Solidity, IBC implementation in Solidity (A security audit is scheduled in Q4 2023.)
- yui-relayer, a relayer that supports BSC (EVMs)
- LCP Clients for Ethereum and BSC, clients to verify proofs submitted from the LCP node.
Here is the light client for Parlia, which we have just unveiled: https://github.com/datachainlab/parlia-elc.
Although this light client is primarily designed to run within the Enclave in the middleware using TEE, “only minimal effort is required to support ICS-02.
Of course, we will support ICS-02 if the community desires it.
With those implementations in place, we now have everything we need to run IBC on BSC.
How TOKI Connects BSC and Ethereum via IBC
TOKI’s first implementation for connecting BSC with Ethereum using IBC is described below.
Since the high verification (gas) cost could pose a significant challenge in making IBC available on both blockchains, we adopt LCP (Light Client Proxy), a proxy middleware embedded with a TEE (Trusted Execution Environment), to replace light client verification in a trust-minimized manner.
The connection flow from BSC to Ethereum proceeds as follows:
- BSC submits a packet, and the relayer queries it.
- The relayer sends it to the LCP node.
- The LCP node verifies the packet and creates a proof using the key generated in the enclave.
- The relayer submits the packet, along with the proof, to LCP Client on Ethereum.
- Light Client on Ethereum then verifies the proof, incurring a reduced gas cost.
For more details, please refer to the following article:
We are planning to add an interface for the WASM light client to LCP Clients so that developers can easily integrate light clients.
Use Cases
TOKI is now building cross-chain unified liquidity on top of the messaging layer, which will be the first application to connect BSC and Ethereum via IBC.
The cross-chain bridge will realize the following use cases:
- Cross-chain swap: Swap tokens on PancakeSwap using your Ethereum tokens.
- Cross-chain Lending: Deposit your Ethereum tokens to borrow stablecoins on BSC, such as through the Venus Protocol.
Binance Japan has announced a partnership with MUFG, one of the largest banking groups in Japan, to explore the issuance of a new stablecoin on both Ethereum and BNB Chain.
The Binance stablecoin will leverage “Progmat Coin”, a stablecoin platform by Progmat. Thanks to a collaboration between Progmat (MUFG) and TOKI, which enables cross-chain capabilities via IBC, TOKI will support cross-chain transactions of Binance’s new stablecoin once it’s issued.
These are just a few examples, and there’s much more you can do when these blockchains are interconnected.
Looking Ahead
We deeply sympathize with the vision outlined in the Interchain Stack Roadmap 2024, which states, “to push the widespread adoption of IBC across external blockchains, built on different consensus protocols.”
In line with this IBC vision, we will continue to contribute to IBC’s expansion. One of the most significant milestones in 2024 for us is the launch of the IBC-enabled cross-chain bridge. As demonstrated in this post, we are on the verge of completing the messaging layer to connect Ethereum <> BSC via IBC. Additionally, we are in the process of building the liquidity layer, which will enable a single-click native token swap between those chains. We plan to launch the testnet in Q1 2024 and follow it up with the mainnet release in Q2 2024.
Following this, TOKI will extend support to Cosmos SDK appchains, Avalanche, Polygon, L2s such as Arbitrum, and other networks, further promoting the adoption of IBC across an even broader range of blockchains.
We’re committed to expanding the IBC ecosystem, aiming to establish IBC as the de facto standard for blockchain interoperability and envisioning a world where seamless interoperability unites diverse blockchain ecosystems.
We’ll be at Cosmoverse, presenting a keynote session. See you in Istanbul!
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