Despite, or possibly even because of, the rapid development of multiple independent networks still jockeying for position among each other, the question of interoperability looms large in the blockchain space. While undoubtedly critical for the technology to reach its maximum potential, blockchain interoperability remains an eminently tractable problem for any blockchain with just two key characteristics. First, the blockchain itself must include a mechanism to verifiably lock and unlock assets that users wish to transfer to another chain; and second, the blockchainโ€™s design and development team must remain firmly open to follow whichever communication protocol emerges as the dominant standard for interchain communication.
To the first requirement, the Topl Blockchian, as part of its UTxO ledger, is designed to enable extended-UTxOs. EUTxOs can be thought of as self-replicating locks that can be applied to the โ€œboxesโ€ containing tokens that require a certain verifiable condition(s) to be met in order for these tokens to be unlocked. While we will expand in further sections on the advantages of EUTxOs, it will suffice for the present topic to say that it is through EUTxOs that the Topl Blockchain enables the verifiable locking and unlocking of outgoing or incoming assets.
Turning to the second requirement, the Topl team is closely following the progress and adoption of both the IBC Protocol spearheaded by Cosmos and the Interledger Protocol led by Ripple. As an early proof of concept, Topl has already developed a prototype swap mechanism to transfer assets between the Ethereum and Topl blockchains.
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