IBC Protocol · Follow
Published in · 7 min read · Apr 2, 2023
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In Feb 2021, the Cosmos Stargate release brought the Inter-Blockchain Communication (IBC) protocol into the world. Stargate was a set of upgrades that implemented the original vision laid out in the Cosmos whitepaper — to build a network of sovereign, interoperable blockchains.
IBC is a general-purpose, message-passing solution that allows blockchains to communicate in a trust-minimized, and permissionless way. We envision a world where IBC acts as the connective tissue for the Internet of blockchains.
Since its launch, the protocol has been adopted by 50+ Cosmos chains, with over 50 million cross-chain transfers worth approximately $30 billion.
The purpose of this blog post is to look at some of the major IBC development milestones, reflect on the progress made over the past two years, and discuss what’s in store for the future of Interchain!
In the spirit of community-led open source development, the R&D, formal verification, implementation, multiple code reviews, and the final go-to-market for IBC were performed by different organizations working in tandem towards a shared goal of a global network of interconnected blockchains.
While IBC went live in Feb 2021, it wasn’t until the launch of Osmosis three months later that IBC found true product-market fit. For the first time, Interchain users were able to manage assets cross-chain without having to think about the underlying infrastructure.
The ability to read and write state between blockchains is a crucial component of cross-chain composability. Features like Interchain Accounts (ICA), Interchain Queries (ICQ), and the packet-forwarding middleware (PFM) form the backbone of interchain composability.
ICA was launched in ibc-go v3. Since then, the ICA controller functionality has been adopted by liquid staking/yield generation protocols like Stride, Quicksilver, and Quasar Finance. The ICA host chain functionality is being used by Osmosis, Cosmos Hub, Juno, Stargaze, Secret Network, and many more.
The ICQ feature is categorized into two different standards — ICS-31 and ICS-32. The spec for ICS-31 was written by Informal Systems, and implemented by Quicksilver. The spec for ICS-32 was designed and implemented by Polymer Labs, Strangelove Ventures, and Quasar.
The PFM built by Strangelove will play an important role in atomic multi-hop transactions. It will also be leveraged later this year to implement path unwinding (more on this below).
This month we witnessed the launch of Replicated Security — v1 of Interchain security. After Stargate, this was perhaps the most important upgrade on the Cosmos Hub. Interchain Security is Cosmos’ vision of shared security, and a step towards horizontally scaling CometBFT.
IBC acts as the key piece of software that enables Interchain Security. The specific IBC-level protocol used for Interchain Security is called Cross-Chain Validation.
While IBC has until now been used for token transfers and cross-chain state interaction, its potential use cases have expanded to include more complex applications, such as transferring security/trust. We’d like to give a massive shoutout to the team at Informal Systems and Aditya Sripal from Interchain GmbH for the incredible work put into designing and implementing Interchain Security!
Finally, it is worth noting that there hasn’t been a single critical bug that was exploited on IBC since its inception, which further reinforces the strength and reliability of the protocol. This is a testament to the exceptional quality of engineering work, rigorous testing practices, and stringent security measures implemented by our engineering team at Interchain GmbH.
In addition to the core teams working on IBC, several other projects have been developing innovative IBC applications and working towards bringing IBC to other ecosystems. Here’s a non-exhaustive list of all the cool stuff going on within the Interchain:
- IBC to Polkadot and Near: By leveraging IBC, the Centauri bridge being developed by Composable Finance and Strangelove will allow Cosmos chains to interact with the Polkadot ecosystem.
- IBC to Ethereum: Teams such as Polymer and Electron Labs are working on bringing IBC to Ethereum and other EVM chains. By augmenting IBC with the use of zero-knowledge proofs (ZKPs), both projects aim to reduce the on-chain costs of header verification without introducing additional trust assumptions. The use of ZKPs along with IBC is exciting as it would allow headers from multiple chains to be batched together, reducing the transaction costs associated with verifying headers.
- IBC to Avalanche: Landslide Network, a subnet on Avalanche, is working towards bridging the Cosmos and Avalanche ecosystems together with the use of IBC. With support from Strangelove, Landslide plans to start work on building a light client for Snowman — the implementation of Avalanche consensus algorithm.
- Inter-rollup communication: Rollups are one of the solutions being explored for blockchain scalability. Communication between rollups is fundamental and IBC is poised to be the standard for inter-rollup communication. Teams such as Celestia, Dymension, Eclipse, and Saga plan to either exclusively use IBC, or a combination of IBC and other bridges for rollup-to-rollup interaction.
- Harnessing Bitcoin security through IBC: By using IBC to checkpoint headers from Cosmos chains to Bitcoin, the team at Babylon is working on bringing faster unbonding periods, and additional security for important transactions on IBC-enabled chains.
- First IBC-enabled non-Cosmos SDK chain: ibc-go, an implementation of the IBC protocol, is a module within the Cosmos SDK. Therefore IBC can be used out-of-the-box for chains using Cosmos SDK as the execution environment. But for the first time last year, we saw Penumbra — a non-Cosmos SDK chain — implement IBC on testnet.
Penumbra uses a Rust implementation (ibc-rs) of the IBC protocol. Several other projects such as Composable Finance, Namada, and Nomic also plan to use ibc-rs. - Cross-chain NFTs: developed by the team at Bianjie, ICS-721 Interchain NFTs will enable cross-chain NFTs for the first time between IBC-enabled chains.
Localhost connection
With the addition of this feature, applications within a chain will be able to communicate with each other through the same IBC interface that is currently used for communication with apps on remote chains. This enhancement will greatly improve the user experience, particularly for those who wish to interact with multiple smart contracts on a single chain via a unified interface.
Adding support for Wasm light clients
Developed by Composable Finance and Strangelove, ibc-go v7.2.0 will add support for Wasm light clients. This will enable seamless upgrades for existing IBC light clients and will make deploying new light clients easier.
The Wasm client is not a client type itself, but rather an interface between the ICS-02 client handler and smart contracts written in Rust that implement light client logic, such as the BEEFY light client or the Near light client.
ADR-8 callbacks to IBC actors
IBC actor callbacks (ADR-8) introduces a standardized interface for IBC actors such as modules or smart contracts to implement, which will allow them to call into IBC apps like transfer or ICA. ADR-8 is an important feature for application composability. It opens up use cases such as:
- Send tokens to a remote chain. If the transfer was successful, then automatically send an ICA transaction to swap and return tokens back to the source chain.
The work on ADR-8 will be finalized in this release. We at Interchain GmbH are also working together with Osmosis and Evmos for ADR-8 implementations for CosmWasm and EVM, respectively.
Channel upgradability
This feature will allow existing channels or middleware to upgrade and add new features. For example, it would allow both ends of a channel between two chains to upgrade and use the fee middleware, which enables on-chain payments for relayers. See here to learn more about channel upgradability.
Ordered channels with timeout
In the current design of ibc-go, if a packet times out on an ordered channel, the channel is closed and a new channel must be negotiated. However, with the introduction of ordered_allow_timeout channels, packets can now time out safely without closing the channel. This means that packets sent after the timed-out packet will continue to be processed without interruption.
Path unwinding
This is a proposed solution to the current inconvenience of path dependence in the IBC protocol that leads to fungibility issues.
Currently, tokens take different paths through the IBC network and are encoded with information about their path in their denomination. This is necessary for security purposes but makes it inconvenient for users and applications who want to send tokens from one chain to another.
Combining channel upgradability with an adaptation of the PFM, path unwinding will allow tokens with non-native denoms to be sent back automatically to their native chains before being sent to a final destination chain. This allows tokens to reach a final destination with the least amount of hops from their native chain.
In line with our product goals of application composability, upgradability, and ecosystem expansion, features such as client and connection upgradability, PubSub queries, and multi-hop IBC are also on our roadmap. All of these features will work towards the goal of making IBC more composable, upgradeable, secure, and extensive.
Even though IBC is currently used exclusively within the Cosmos ecosystem, its superior design, software, and strong network effects have captured the attention of different communities outside of Cosmos. With its immense potential to become the internet of blockchains, it’s not a matter of if, but when IBC will become the go-to solution for secure and efficient blockchain interoperability.
The future of blockchain interoperability is promising, and IBC will continue to lead the way towards a new era of innovation.
About the Author:
Adi Ravi Raj works at Interchain GmbH and is the Protocol Analyst for the IBC team.
Shoutout to Susannah Evans for the feedback and review.
