In the last blog post, I shared my inspiration behind Lithosphere. In this blog, I’ll dive deeper into Lithosphere’s stack and innovative new features.

While working on Lithosphere’s genesis block – Kamet, many questions came up during our initial research, but the main one was: How can we connect all current and future blockchains that don’t speak the same language(s) and have very different stacks?

We love Ethereum, Polkadot, and other similar projects. I truly believe most blockchain networks serve unique purposes and are vital to the ecosystem, so connecting them is crucial. I thought about going with Dfinity’s approach (build a protocol layer that supports all available protocols for interoperability), but that removes sovereignty at the core of blockchain use cases.

What is interoperability?

Interoperability means “cross-communication,’’ where two or more completely different systems can talk to each other and exchange value. In the traditional financial system, the majority of payments infrastructure is interoperable.

In the blockchain space, interoperability is when two or more blockchains can talk to each other and exchange value. If you’re traveling abroad with a card issued by your bank, you know it is accepted everywhere regardless of what the local currency is — that’s interoperability.

To make blockchains interoperable, I had to go back to the drawing board and design a new layer one protocol that’d support existing and future blockchains.

Past solutions (workarounds)

There are many existing solutions out there with limitations and inefficiencies to solve this cross-chain interoperability problem. Let’s discuss each one of them briefly to build the context.

Centralized interoperability

Many third-party centralized solutions let you convert cryptocurrencies so you can pay for goods, but why do we need a centralized intermediary? If I have to rely on a centralized intermediary anyways, I could use my credit card or services like Cash App, which are much easier to use and are more efficient.

The majority of these centralized systems have a custodial wallet. When you purchase a different cryptocurrency, they perform an Atomic swap or make an independent conversion based on the current market rate.

This centralized operation kills the purpose of blockchain and decentralization all by itself and is not a permanent solution!

Atomic swaps

Atomic swaps are a cross-chain value exchange mechanism where users can convert their cryptocurrencies into a peer-to-peer environment. Atomic swaps use a set of contracts called Hashed TimeLock Contracts, or HTLCs. These HTLCs help move value across different networks. In atomic swaps, there is no actual cross-chain communication happening on both the networks, but rather two parties agree to make a transaction that will move value across the network through a time-locked contract.

However, there is one big limitation with atomic swaps — both the blockchain networks should have the same hashing algorithm and should support the execution of HTLC contracts. Now a few blockchains do share the same hashing algorithm, but the majority of them don’t.

How Lithosphere achieves interoperability

The main component of the Lithosphere blockchain is the Myriad Distributed Key Management (MDKM) technology. MDKM enables various digital assets to be mapped on and off the Lithosphere blockchain seamlessly and securely by creating a bridge between assets. MDKM uses the “private key sharding” concept to secure users’ assets. The network also utilizes the Time-Lock function. The concept of time in smart contracts allows the Lithosphere network to process complex financial transactions involving time such as derivatives, futures, loans, and mortgages on the platform.

Through MDKM, Lithosphere has an ecosystem supporting the integration of blockchains with ECDSA (Bitcoin, Ethereum, Litecoin, etc.) or EdDSA (Cardano, NANO, Stellar, WAVES, and even Facebook’s Libra!) as signature algorithms. This means that almost every blockchain out there could be integrated into Lithosphere’s ecosystem.

Once a user locks in his or her assets in the Lithosphere blockchain, these nodes will only receive shards of the private key, and will never have access to other shards, so assets are completely safe. With a distributed key generation and signing algorithm, private keys are no longer a single point of failure. The majority of MDKM nodes will not belong to the KaJ Labs Foundation. Lithosphere’s cross-chain solution is therefore fully decentralized.

LinBFT: Linear-communication Byzantine Fault Tolerant algorithm

Prior to drafting Lithosphere’s concept, it was clear to me I had to go back to the drawing board to try and innovate but not reinvent the wheel. I started with the BFT consensus algorithm. All blockchains have a similar BFT algorithm — the PBFT. The PBFT was one of the first production-ready BFT algorithms in the world, but it has its flaws so we decided to go with a novel consensus algorithm proposed by Dr. David Yang, the LinBFT consensus algorithm. LinBFT is based on the popular PBFT protocol, and cuts down its O(n4) complexity with three tricks, each by O(n): linear view change, threshold signatures, and verifiable random functions.

Deep Neural Networks

Lithosphere introduces Deep Neural Networks in smart contracts for the first time to make smart contracts intelligent by incorporating large-scale deep learning networks into the code. Doing this has numerous potential applications. For instance, in DeFi, a DNN can detect abnormal token price movements, which could be part of a flash-loan attack. A decentralized autonomous organization (DAO) can trade tokens automatically with a DNN trained continually through reinforcement learning.

Lithosphere Evolution Proposal #100: (LEP100) Token Standard 

As we started building our foundation nodes, I was thinking about token standards. Why did we need different standards to represent fungible/non-fungible tokens? If we envision billions of people using the network, using different token standards to represent fungible and non-fungible assets could easily congest the network. I knew we needed a better token standard for our network and all blockchains connecting to Lithosphere.

I researched ERC20, ERC1155, BEP2, BEP20, and I was inspired to propose the LEP100 token standard that’s in use today on the Lithosphere network private testnet.

LEP100 is a novel standard for multi-tokens, allowing for a single contract to represent multiple fungible and non-fungible tokens, along with batched operations for increased gas efficiency. Most importantly, LEP100 tokens can be exchanged for other token equivalents. LEP100 tokens are fueled using the Litho Coin (LITHO). This allows even more interoperability within the Lithosphere network, and other native blockchain networks like Ethereum, Smart Chain or Cosmos since contracts can now exchange tokens that support various already available standards. Lithosphere’s native digital asset, Litho (LITHO), plays a role similar to Ethereum gas. Specifically, users can pay for fees or transfers of LEP100 tokens with $LITHO.

The KaJ Labs foundation believes the LEP100 token standard will be the go-to standard for token development now and for years to come.

Why is Cross-Chain interoperability important for Defi

DeFi, or Decentralized Finance, is a set of financial services delivered through blockchains via smart contracts in a decentralized environment. 12 years ago, Bitcoin disrupted the model of “currency’’ by providing an alternative peer-to-peer monetary system.

However, what about all the financial services like banking, lending, and savings, mortgages, etc.? Well, that’s what DeFi is all about, bringing the traditional financial services ecosystem to the world of blockchain and cryptocurrencies. “We disrupted the currency, now let’s disrupt the financial system’’ is the motive behind the DeFi movement. But, without establishing cross-chain interoperability, the DeFi movement will remain in its infancy. Think of every single blockchain as a separate economy. If these economies can’t work with each other, the entire ecosystem stays stagnant.

The need to link all blockchains and facilitate their communication despite the architectural differences arose even more during the recent DeFi boom, where the majority of the tools and applications used were limited to the Ethereum blockchain, with the involvement of only a small portion of Bitcoin. At the same time, other giant blockchains like Dogecoin and Litecoin are almost totally absent. Billions of dollars are locked in these blockchains, and they can’t be used in the DeFi space besides basic value transfer.

Next Generation Interoperability Blockchain — The Lithosphere Network

Lithosphere is a highly secure network of diverse blockchains where dApps and decentralized services will interoperate between different blockchains on the network.

I believe that the Internet of Value (IoV), in its essence, can be achieved by not just focusing on the exchange of value but on its usability, scalability, and interoperability.

For more information, visit Lithosphere’s website and join our community.

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