Author: knwang, founder of Khalani Network Source: X, @knwang Translation: Shan Ouba, Golden Finance
Blockchain interoperability is the last frontier to unleash the full potential of decentralized technology. However, the heterogeneity of trust between different networks has created a fragmented ecosystem, hindering the seamless implementation of cross-chain interactions. Although many solutions have emerged to address specific aspects of this challenge, a truly unified solution remains elusive.
This paper proposes a paradigm shift: an intent-driven interoperability solution that embraces trust diversity rather than trying to homogenize it. By leveraging the power of intent and permissionless trust projection, we envision a future in which the complexity of various blockchain environments is transparent to all participants, paving the way for a truly interconnected digital economy.
The Ultimate Goal of Blockchain Interoperability
The fundamental challenge facing blockchain interoperability today is the heterogeneity of trust between different networks. Whether it is Layer 1, rollup, or application-specific chain, each blockchain operates under unique trust assumptions and finality rules, which hinders the seamless implementation of cross-chain interactions.
This fragmentation of trust has driven innovation in the blockchain industry and the search for new paradigms that can bridge these gaps while retaining the unique advantages of each network.
As we evaluate existing solutions and design new ones, we must always keep in mind the ultimate goal of interoperability: a seamless, unified blockchain ecosystem that can span heterogeneous trust domains.This vision challenges us to design an architecture that makes the complexity of different trust environments transparent to all participants. These goals represent the pinnacle of blockchain interoperability—a future in which the boundaries between chains disappear, unleashing the full potential of a truly connected digital economy.
Fragmentation and Challenges of a Multi-Chain Ecosystem
To fully understand the challenges of unifying multiple blockchains, it is first necessary to understand what we have lost in the move from synchronized, consistent state machines to blockchain networks. This loss manifests as “fragmentation,” which is a key challenge that interoperability solutions must address:
1. Combinatorial Fragmentation
Single-Chain: Applications can seamlessly integrate with applications on any other chain.
Multi-Chain: Applications on different chains require intermediaries (validators, relayers, resolvers) to integrate.
Impact: Developers face greater complexity in application design and deployment decisions.
2. Liquidity fragmentation
Single chain: All applications share the same liquidity protocol pool.
Multi-chain: Liquidity is isolated in different chains.
Impact: Capital efficiency is reduced, and liquidity providers face challenges in optimizing strategies.
3. Settlement fragmentation (i.e., the “train and hotel problem”)
Single chain: Transactions involving multiple applications either succeed completely or fail together.
Multi-chain: Cross-chain transactions may be partially executed, resulting in inconsistent states.
Impact: Developers must implement complex rollback mechanisms, and users face greater transaction risks.
4. User experience fragmentation
Single chain: Users can view all assets and interact with all applications through a unified interface.
Multi-chain: Users must switch between multiple interfaces and wallet connections to manage assets and use applications.
Impact: Increased cognitive burden on users, which may hinder adoption and usability.
These fragmentations bring different challenges:
For developers (fragmentation 1 & 3): The challenge is how to optimize the deployment of applications and manage the consistency of cross-chain transactions. When developers need to integrate other applications, how to deal with the "train and hotel problem" of multi-chain transactions, ensuring that these transactions either succeed collectively or fail collectively?
For Liquidity Providers (Fragmentation 2): How can they efficiently provide capital and earn fees across multiple decentralized liquidity domains while managing the associated risks and complexity?
For User Experience (Fragmentation 4): Wallet developers and front-end developers are challenged with how to create a “one-click” user experience in a heterogeneous trust environment. How to abstract away complex issues such as cross-chain bridging, gas fees, and transaction rollbacks to provide a fast and secure user experience?
Solving these fragmentation challenges is critical to achieving a seamlessly interconnected blockchain ecosystem. As we explore potential solutions, we must consider how each approach addresses these fundamental issues: composability, liquidity, settlement, and user experience. In addition, interoperability is not limited to traditional “cross-chain projects”. It permeates every aspect of blockchain infrastructure. Whether it’s a scaling solution syncing with its base chain, a privacy protocol reconciling hidden and public data, a liquidity pool connecting siloed assets, or a user interface simplifying a fragmented user experience — every challenge inherently involves reconciling different trust assumptions and operating models. This broader perspective transforms interoperability from a specific technical challenge to an overarching design principle that shapes the entire blockchain ecosystem.
A Review of Existing Solutions
Let’s examine some of the current solutions in the industry and assess how they address the interoperability challenges we’ve identified.
Application-centric Approach
The application-centric approach argues that interoperability should be addressed at the application level. This approach requires applications to be deployed on all the chains they want to meet with users, with the various deployments communicating via cross-chain messaging.
Fundamentally, this approach places the burden of managing cross-chain complexity on the developer. They must choose trust providers that can underwrite cross-chain finality risks and handle cross-chain reverts caused by state contention.
This approach has excellent flexibility, allowing developers to choose external trust providers to extend to different trust domains. However, this comes at the cost of self-management complexity. While it solves the composability fragmentation problem to some extent, it greatly increases the burden on developers and may not fully solve other fragmentation problems such as liquidity or user experience.
Infrastructure stack-centric approach
The infrastructure stack-centric approach believes that interoperability should be solved at the chain infrastructure level. Architecturally, it provides an intra-protocol interoperability solution for blockchains built with the same software stack, abstracting away complexity for developers and users.
This is one of the oldest blockchain interoperability solutions, dating back to the early days of Cosmos and Polkadot. These solutions tend to form ecosystem clusters, and more recently the zk-rollup ecosystem has joined the race to provide ecosystem-specific zk-provers and proof aggregator layers with shared bridges.
This approach excels at abstracting complexity and optimizing for the best developer experience. While it does not solve the “trains and hotels” problem per se, that burden does not fall on developers. Each ecosystem tends to converge to an ecosystem-specific shared orderer to help achieve cross-chain execution atomicity. In many cases, these “infrastructure clusters” solve cross-chain liquidity problems through shared bridges, which are often integrated with proof aggregators in a hub-and-spoke topology, or routed through liquidity hubs in more peer-to-peer topologies such as IBC.
On-chain Liquidity-centric Approach
The on-chain liquidity hub approach argues that in a cross-chain environment, assets are almost always transferred across chains. Therefore, interoperability should be solved as a multi-chain liquidity layer. Applications can be built on top of these liquidity protocols to achieve multi-chain interoperability. Liquidity hubs can take the form of independent blockchains or smart contract-based reserves with pricing mechanisms set on each connected blockchain.
This approach excels at unifying and allowing for the formation of a unified cross-chain liquidity market that optimizes for the best capital experience. It directly addresses the liquidity fragmentation problem, potentially improving capital efficiency across the ecosystem. However, they may require developers to integrate with specific liquidity protocols, and it does not completely eliminate the complexity of the "train and hotel problem" when cross-chain execution goes beyond token swaps.
Intentional Off-Chain Liquidity Approach
The cross-chain intent approach adopts an off-chain-centric interaction model, letting users send orders to a network of solvers. The protocol acts as a multi-chain intent settlement system between users and solvers to facilitate cross-chain asset exchanges.
Intent provides strong user-perceived atomicity, with binary results - either the exchange goes exactly as expected, or nothing happens to the user. This provides a solution to the "train and hotel" problem, but with a focus on cross-chain exchanges.
Intents are primitives for user experience, providing users with an end-to-end user experience abstraction. In addition, intent-based exchanges provide optimal execution latency and a more seamless "single-chain"-style user experience.
This approach excels in latency and cross-chain atomicity, but relies on the presence of off-chain solvers. Intent protocols typically do not come with liquidity markets and require solvers to carry inventory and pricing liquidity, which makes the cost of running solvers higher than other off-chain agents in alternative solutions.
Shared Sequencing/Block Building Approach
The shared sequencing/block building approach suggests that interoperability issues should be addressed at the level of coordinated sequencing or block building. Architecturally, it requires blockchain validators to opt-in to the block building market. When builders win the right to build blocks for both blockchains simultaneously, they can provide strong guarantees for the inclusion and execution of transactions on both blockchains.
This approach excels in providing cross-chain atomicity and directly addresses the settlement fragmentation problem. However, it requires orderers or proposers to opt-in to a specific shared orderer or builder market, which makes the barrier to integration higher. While it provides strong guarantees for cross-chain transactions, it can lead to centralization issues and may not fully address other fragmentation issues such as liquidity or user experience.
Zero-Knowledge Proof-Based Approaches
Zero-Knowledge Proof (ZKP)-based interoperability approaches are a variation of the message passing approach that focuses on using ZKPs to prove consensus-based or state-based zero-knowledge proofs. This approach excels in security and provides high security guarantees for cross-chain interactions.
However, while this area is rapidly evolving, the cost and latency of proofs are still an issue. For chains that are not built using the ZK infrastructure stack, manual integration may still be required on both the proving and verification sides.
ZKP-based interoperability offers a promising path for future interoperability solutions, especially when it can be combined with atomicity solutions such as intent and shared ordering or liquidity-based solutions such as shared bridges. However, like the messaging approach, it is not opinionated in providing developers with a unified liquidity market, user experience optimization, or cross-chain atomicity.
Account-centric approach
The account-centric approach, also known as the user-centric approach, believes that interoperability issues must be solved at the account or wallet level. Architecturally, it provides a user-centric solution that abstracts user balances across blockchains and provides users with a chain-abstracted way to interact with applications on any blockchain through intents and solvers that implement those intents.
From the user's perspective, it is like a magic wallet that allows them to write transactions using assets from any blockchain and interact with applications on any blockchain as if they were all on the same chain. This approach excels at providing the best user experience and greatly solves the user experience fragmentation problem. However, it may involve complex backend implementations and security authentication and verification networks, and may not directly solve other fragmentation issues such as liquidity or composability.
Hybrid Approach
While each approach has unique advantages in addressing specific interoperability challenges, they also have inherent limitations. Developers recognize that no single solution can fully address all aspects of interoperability, and therefore have also adopted a hybrid approach.
Notable hybrid examples include:
Applications are launched on an application rollup based on their own infrastructure stack, while leveraging messaging solutions or intent solutions to connect with out-of-cluster blockchains. This hybrid approach takes advantage of ecosystem-specific optimizations while maintaining broader interoperability.
Account-centric solutions work in tandem with intent-based solvers to ensure atomicity of cross-chain execution. This combination enhances the user experience while addressing settlement fragmentation issues.
Infrastructure stack clusters are combined with tightly integrated cross-chain liquidity protocols to provide applications with in-cluster developer ergonomics and cluster-external key liquidity solutions. This approach combines the advantages of both infrastructure stack-centric and liquidity-centric solutions.
Trust: The Ultimate Fragmentation Problem
The quest for an ultimate interoperability solution that combines all the advantages faces a fundamental challenge: trust. All of the solutions we mentioned ultimately rely on either standardizing cross-chain trust or relying on specific trust providers. This fragmentation of trust is the core reason why it is not easy to integrate all solutions.
The Dilemma of Trust Extension
Permissioned trust extension approaches such as proof of events or state combined with shared central chain consensus nodes aim to "standardize trust assumptions." However, this approach faces anti-network effects. As states from heterogeneous domains are collated into homogenous content, the risk increases exponentially with each new chain added. As a result, centralized entities become increasingly conservative, as a single mistake can be catastrophic. This increasing risk aversion can inhibit innovation and limit the growth potential of the entire ecosystem.
On the other hand, permissionless trust extension, while avoiding the drawbacks of centralization, also faces its own challenges. The main question is: how can all participants - whether users, developers or capital - effectively build and transact in heterogeneous trust environments?
The universal challenge
The fundamental challenge for all interoperability solutions is whether they can scale across any trust domain without relying on specific infrastructure or vendors. This represents a core barrier to achieving true permissionless scaling.
However, this challenge also reveals a path forward: a flexible, adaptable trust management framework may be the key to integrating multiple approaches and achieving true interoperability. Such a framework would allow solutions to seamlessly span multiple trust domains, paving the way for a more interconnected blockchain ecosystem.
Potential solutions towards permissionless trust projection
Trust projection is an architectural pattern that stems from a key question: if standardizing trust zones by trusting vendors does not scale, how can we build applications and provide liquidity in heterogeneous trust environments? The concept attempts to embrace the diversity of trust models rather than trying to homogenize them.
Global State Layer with Permissionless Trusted Projection
The most basic implementation of this model is a permissionless global state projection layer. This approach provides a unified view of external blockchain state, allowing developers and liquidity providers to interact with state from multiple chains. However, this approach also has its flaws.
It allows anyone to become a counterparty to remote state, usually through bridge protocols. These protocols hold collateral on one blockchain, mint wrapped assets on another chain, and manage cross-chain withdrawals through relayers.
During the "bridge wars", competing protocols compete to establish their wrapped assets as the standard representation on different platforms. While this approach creates a unified platform for developers and consolidates cross-chain liquidity markets, it shifts significant risk to users and protocol governance. Users take on risk when they hold wrapped assets, while protocols (and token holders) take on risk by accepting those assets as collateral.
Furthermore, this approach requires users to transact directly on the global state layer, effectively making it the “main chain” for all cross-chain interactions. This increases the burden of use for users and hinders widespread adoption of this approach.
Global Intent Marketplace with Permissionless Trust Projections
The solution to the global state layer challenge lies in redefining its role: not as an application platform, but as a marketplace where solvers collaborate on permissionless state projections through an overlay of intent.
This shift changes the architecture in several key ways:
It becomes a layer where solvers interact, rather than a layer where users transact directly.
It acts as a collaboration platform for solvers, rather than an application platform for developers.
It is structured and traded around a settlement-focused liquidity market, rather than a trading-focused liquidity pool.
Let’s unpack the components of this architecture:
Solutions project state as collaborative intents that embed trust. Solutions can project state from any external domain into this market, but cannot take it as part of the state. Instead, they present their capabilities as “collaborative intents”. For example:
I have 3000 USDT on chain A and can be a counterparty to any settlement request that accepts IBC light client proofs, UMA optimistic proofs, or plonky3 zero-knowledge proofs that can use up to 3000 USDT and accept USDC or USDT payment on chains B, C, and D.
This approach allows for a flexible and dynamic representation of cross-chain settlement capabilities.
Embedded Trust Intent as User Trading Primitives: Applications, wallets, or frontends can encode trust semantics directly into the intent of user trading primitives. For example: I want to exchange 1000 USDT on chain A for at least 999 USDT on chain B, facilitated by a settlement oracle based on IBC light client proofs.
This approach allows users to explicitly specify their trust requirements in their trade requests.
Trusted Commitments Embedded with Trust as Long-Running Intents: Liquidity protocols evolve into risk-aware trusted commitments as long-running market-making intents.
Automated Collaborative Settlement with Remote Chain Settlement: Solvers become key enablers of this new paradigm. They:
Observe the intent market
Match compatible intents with trust constraints
Facilitate the delivery of transaction outcomes
Generate settlements and proofs
Help users operate in heterogeneous trust environments
This architecture opens the possibility for more flexible, scalable interoperability solutions that do not rely on specific trust. By shifting complexity to solvers and encoding trust requirements in intents, it reduces the burden on users and developers while enabling seamless cross-chain interactions.
Embracing the diversity and complexity of trust
Rather than trying to abstract away trust domains, this architecture embraces and exposes risks at the core of transaction structure. It presents these risks to high-level operators who can manage them. Rather than internalizing and managing complexity, the system strives to scale complexity, allowing for more sophisticated and efficient cross-chain interactions.
Inversion of Control for Stakeholders
This architecture represents a classic inversion of control for developers, users, and capital. Traditionally, wallets, applications, and capital had to rely on and inherit the rules of the underlying infrastructure. Now, we encapsulate all infrastructure concerns as proof obligations and inject them as transaction dependencies. These obligations are then assigned to settlement counterparties, effectively connecting all trust domains.
An open and extensible substrate for integrating all interoperability solutions
The real strength of this architecture is its ability to act as the connective tissue for all the other interoperability solutions we have discussed previously. Its power comes from its peer-to-peer market structure, which does not require other protocols to be intermediaries.
Cross-chain messaging and ZKP-based solutions: These can be integrated as provers in external trust zones through relayers. They provide the necessary proofs to verify the state between different chains. On the other hand, the intent market complements the messaging or ZKP-based interoperability solutions as a unified liquidity layer and relay infrastructure, and can be extended with the proof domain.
Interoperability solutions based on infrastructure stacks: These solutions can be integrated through relayers and provers, acting as state counterparties. They can leverage existing infrastructure to provide trusted state ownership for intent markets. On the other hand, the intent market complements the infrastructure stack-based interoperability solutions as a scalable intent-based interoperability solution, connecting all other infrastructure stack-based clusters.
Account-centric interoperability solutions: These solutions can be integrated through solvers that are liquidity takers and cross-chain settlement request owners. They can use the intent market to provide cross-chain transactions for their users. On the other hand, the intent market complements the account-centric interoperability solutions as a unified off-chain liquidity and solver infrastructure that is scalable to future blockchains.
Intent-centric interoperability solutions: Similar to account-centric solutions, these solutions can also be integrated through solvers that are liquidity takers, leveraging intent markets to fulfill cross-chain user intent. On the other hand, the intent market complements the intent-centric interoperability solutions as a unified solver infrastructure that can be extended with any graph settlement protocol.
On-chain liquidity protocols: On-chain liquidity protocols can be integrated through rebalancing operations of the intent market. On the other hand, intent markets complement on-chain liquidity protocols as unified relay infrastructure, connections to new trust domains, and atomic primitives for more complex cross-chain interactions beyond token swaps.
Shared sorters or builders: These can be integrated through solvers or can directly participate in shared intent markets. On the other hand, intent markets complement shared sorters and builders as unified off-chain liquidity and solver markets that can respond to partial block building requests and scale with the builder market itself.
By providing a framework that can both integrate and complement these different solutions, intent markets provide a path to a more unified and interoperable blockchain ecosystem. It allows each solution to play to its strengths while addressing the overall challenges of trust fragmentation and complexity in cross-chain interactions.
Optionality Beyond Trust
Intent markets are unique in that they provide optionality at the transaction level. While we observe that intent markets function as interoperability protocols with trust embedded in their transaction structure, this is only one aspect of their potential.
The true power of intents lies in their ability to introduce optionality along arbitrary dimensions. Beyond trust, we can extend this flexibility to aspects such as latency, privacy, reputation, compliance, and even more that we have yet to explore. This ability to scale, stemming from the full expressiveness of intents and the full programmability of collaborative resolution, opens up a world of possibilities.
Unifying Trust Domains through Intent-Driven Interoperability
Our journey in the blockchain interoperability space has brought us fully to our ultimate goal: a seamless, unified blockchain ecosystem across heterogeneous trust domains. The proposed intent-market-based approach represents a paradigm shift in this pursuit and aligns with our vision of making trust complexity transparent to all participants.
By offloading the complexity of cross-chain interactions to sophisticated solvers, it simplifies the experience for both users and developers while fostering a strong ecosystem of capital. The intent-driven, risk-aware framework not only integrates existing solutions, but also paves the way for future innovation.
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