Challenges and New Standards for Cross-Chain Interoperability in the Multi-Chain Era

In the context of a multi-chain coexistence in blockchain, achieving secure and convenient cross-chain interoperability has always been a major challenge faced by the industry. As the demand for cross-chain solutions grows among users, these challenges have become more pronounced. The main aspects include the following several points:

Security Issues

Security is the most critical challenge in cross-chain transactions. Cross-chain bridge protocols that can attract a large amount of assets often become primary targets for hackers. Blockchain systems rely on validators for transaction validation and execution, and cross-chain bridges also require trusted third-party validators to handle cross-chain transactions. If the incentives for cross-chain bridges are insufficient, the number of validators is too low, or the trust model is overly centralized, hackers may exploit the validators to compromise the cross-chain bridge and steal assets. Additionally, vulnerabilities in the cross-chain protocol's own contracts often serve as entry points for hacker attacks.

In August 2024, a certain cross-chain bridge was suspected to have suffered a hacker attack, resulting in a loss of approximately 12 million USD. In March 2022, the bridge experienced a security incident referred to as "the largest loss in DeFi history," where hackers attacked 5 out of 9 validators, stealing assets worth over 600 million USD.

Gas Fee Issues

Cross-chain transactions usually incur higher Gas fees. Users need to pay operation fees on both chains simultaneously, which increases the actual transaction cost.

Complexity of Operation

Each blockchain operates as an independent system, with its own consensus mechanism and protocol. This decentralized and isolated state causes users to engage in complex and cumbersome operations when transferring assets and data across chains. For users who trade frequently, there is also the risk of asset price slippage, which further increases the difficulty of trading.

In response to the above issues, several leading development teams in the industry jointly proposed a new standard plan ERC-7683 in May 2024, aiming to make cross-chain transactions simpler, faster, and more secure through a shared execution network.

ERC-7683 Standard

The ERC-7683 standard is created based on the CrossChainOrder structure and provides an ISettlementContract smart contract interface that allows for the implementation of standard APIs for cross-chain transactions. The core technical proposal of this standard is to ensure that all "cross-chain intents" follow the same order structure, which can greatly enhance the flexibility and user-friendliness of cross-chain operations.

Application Status

In August 2024, a certain Layer 2 solution announced the adoption of the ERC-7683 cross-chain standard, aiming to achieve efficient transfers of ETH and USDC within its ecosystem and promote greater application layer interoperability within the broader Ethereum ecosystem.

It is worth noting that although the ERC-7683 standard can ensure consistency in user experience, it still faces challenges in obtaining sufficient liquidity in cross-chain transactions. If cross-chain liquidity is insufficient, it means that it is difficult to gather enough active "Fillers" to support users' "cross-chain intentions". Therefore, the implementation of the ERC-7683 standard needs to create a wide-area effect—more use cases need to be integrated, and more users need to participate in order to attract more Fillers, ultimately improving the overall efficiency of cross-chain transactions.

Industry Support

Ethereum co-founder Vitalik Buterin publicly expressed support for the development of the ERC-7683 standard. He pointed out that operations based on this standard can include batch transactions, Merkle proofs, and other on-chain activities. Vitalik illustrated that with the ERC-7683 standard, users can easily transfer any on-chain assets to another account by simply pasting an ERC-7683 address into their wallet.

Conclusion

The multi-chain structure is the development trend of the Web3 era, and the optimization and simplification of cross-chain transactions will be key challenges driving the development of the Web3 world. The ERC-7683 standard directly addresses the pain points of cross-chain transactions and is expected to significantly enhance interoperability between blockchains, with profound implications for the blockchain world. Currently, users can look forward to the experience improvements brought by the ERC-7683 standard, which will also inject liquidity support into more DeFi projects and accelerate their development.