Cross-Chain Technology

09 Oct 2018

What is cross-chain technology?

Cross-chain technology refers to the technology that can convert assets on a specific blockchain into assets on another blockchain, thus implement the value flow between chains. To put it simply, cross-chain technology is a chain conversion behavior of different asset holders, which does not change the total amount of assets on each chain. Similar to the coin-to-coin trading service provided by the exchange, but the exchange in the trading platform does not take place on the chain.

Why does it matter now?

FUSION, an infrastructure protocol designed to connect both traditional and cryptofinance systems that support digitized assets, has secured $12.3 bln in financial assets from three strategic partners, who will lock those assets on the startups’ public blockchain platform.

Why we need an interoperability solution?

Diverse networks competing for a share of the crypto market have unique advantages and disadvantages. As time goes on, it is becoming clearer that there is no perfect solution to all blockchain needs. There are trade-offs that have to be made in development to optimize a blockchain for specific purposes. There won’t be just one chain in the future. The difficulty of cooperating between different blockchain projects greatly limits the space for the use of blockchain projects. Therefore, how to implement cross-chain technology and multi-chain integration has become one of the hot spots in the current blockchain research.

Basic principle

All cross-chain techniques could be simplified to the the following progress:

  1. User initiates a request to the cross-chain protocol for exchanging A blockchain coins for B blockchain coins
  2. Cross-chain protocol lock user’s A blockchain coins
  3. Cross-chain protocol lock corresponding amount of B blockchain coins
  4. Send B blockchain coins to user’s B chain wallet address, and take away user’s A blockchain coins;

Technical Solutions

Currently, There exist three cross-chain technologies:

Application scenarios


We should keep watching the financial applications based on cross chain platforms. In the future, more and more assets in real world will be mapped to blockchain and become digital assets. Digital assets can be transferred, mortgaged and traded in different chains through cross chain technology, which greatly improves the security, traceability and convenience of asset transaction.