Arbitrum and trading native assets from different blockchains
- Arbitrum makes it possible to trade native assets from other blockchains on its decentralized applications (dApps). This is achieved through a feature called cross-chain interoperability.
- Cross-chain interoperability allows assets from different blockchains to be used and exchanged within the same ecosystem.
- In the case of Arbitrum, it means that users can potentially trade assets that originate from other blockchains, such as Bitcoin or tokens from other Ethereum-compatible chains, on Arbitrum-based dApps.
- This interoperability expands the range of assets that can be traded and used within Arbitrum's ecosystem, providing users with more flexibility and options when interacting with decentralized applications on the platform.
- It can also facilitate liquidity and trading opportunities by tapping into assets from various blockchains.
- However, the specific implementation and support for cross-chain interoperability may vary depending on the dApps and protocols built on top of Arbitrum.
Another way to look at Arbitrums cross blockchain inter-operability .
Okay, so let's say you have different kinds of toys, like LEGO blocks and action figures. Each type of toy comes from its own box, like LEGO from one box and action figures from another.
Arbitrum is like a big play area where you can bring all your toys together and play with them. But here's the cool part: Arbitrum has a magic trick that lets you play with toys from different boxes at the same time! It's like if you could use your LEGO blocks and action figures together in the same game.
How does Arbitrum do this? Well, it's like having a special translator who understands both LEGO language and action figure language. So, when you want to use your LEGO blocks in a game with your action figures, the translator helps make it happen smoothly.
Similarly, on Arbitrum, there's a special feature that acts like the translator for different types of tokens from other blockchains. So, if you have tokens from another blockchain, like Bitcoin or tokens from a different Ethereum-like chain, Arbitrum can help you use and trade them alongside the tokens native to Arbitrum.
This means you can bring your different types of tokens from other blockchains and use them in the games and apps on Arbitrum, just like you would with the tokens native to Arbitrum itself. It's like bringing all your favorite toys to play together in one big playground!
Last Words
- This is very interesting because it eliminates the need for wrapped tokens, which require swapping your native token from blockchain A for a native token on blockchain B, which represents the value of the token from blockchain A on blockchain B, while the native tokens are held in a wallet until the investor is ready to swap the tokens back and reclaim his / her native asset.
- These wraps involve using wallets and bridges, which are big honey pots, which atract hackers and scammers.
- Then the bridges or wallets are hacked or exploited with a loss of native tokens, and significant losses to investors.
- Avoiding these bridges and the hacks and exploits these bridges attract is very important, and it can be completely eliminated by cross blockchain interoperability protocols.
- Safety is an important concept, which has been lacking in cryptocurrency, so hacks and large losses are common place.
- Projects like Arbitrum, with some forms of cross-blockchain inter-operability are strategies which can make these hacks and exploits a thing of the past.
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I am a writer who has focused on cryptocurrency, the blockchain, non-fungible digital tokens or NFTs, and decentralized finance for over six years. But I also like to write about life, my garden, my island home and other stuff.
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Thank you
So Arbitrum could likely solve the problem of scammers and hackers who exploit wrapped tokens.
Exactly.
One of the biggest vulnerabilities for crypto is sending it to briodges to wrap and invest. Bridge hacks are the biggest publized threat last year and even hit our own BHBD bridge
https://hive.blog/hive-167922/@shortsegments/arbitrum-cross-chain-interoperability
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Nice little post on Arbitrum. You took the plunge into the rabbit whole of second layer solutions, but stayed on the service of the complexity. Good Job!
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You have been gone for a while.