Cosmos IBC is one of the most widely used interoperability standards. Can IBC become a Web3 standard like TCP/IP, and why are teams trying to introduce IBC into other ecosystems? Which applications can be implemented through IBC? LongHash Ventures investment analyst Raghav Agarwal explores these questions in his article.
IBC is a building block of Cosmos that enables communication between blockchains. Cosmos IBC is modeled after TCP/IP and is a universal solution designed to connect blockchains with different consensus algorithms and state machines. The design of Cosmos IBC is to manage information transfer to construct a large number of applications. Cosmos IBC requires a multi-step process to build connections and channels between two blockchains. After the connection is established, IBC needs to ensure that relayed packets can be considered sent by the source chain, but the end of the information in these packets needs to be defined at the application layer.
IBC relies on relays and light clients (LC) for data transmission and verification. The relay is an off-chain agent that monitors the source chain and the destination chain, and sends packets from one chain to another. The LC on the destination chain verifies whether an event is indeed recorded by using the block header. Some applications implemented by IBC include interchain accounts (ICA), interchain queries (ICQ), secure replication, atomic swaps, cross-chain governance, and token transfers. ICA and ICQ together can improve the composability and usability of the interchain ecosystem, make interoperability easier, and release opportunities for new interchain business models.
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Astroport is an example of a cross-chain application enabled by IBC, which initially only ran on Terra and has now been extended to Injective and Neutron, and is about to be launched on the Sei Network. With the integration of IBC relays, Astroport is positioned to support a range of use cases, including cross-chain governance, token transfers, and fee collection. Teams currently working to expand the IBC footprint outside of the Cosmos ecosystem include Polymer Labs, Datachain, Composable Finance, and Amherst Labs.
Reference: https://twitter.com/0xRaghav/status/1672348116748566535
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