Polkadot and Ethereum are two separate networks, still isolated from each other, and are therefore unable to communicate with each other.
However, a new initiative by LiquidApps, in collaboration with Bancor, wants to build a cross-chain bridge between its base on Ethereum and the parachains on Polkadot.
LiquidApps is a provider of decentralized development solutions, while Bancor is a protocol on Ethereum for exchanging non-custodial tokens using pooled liquidity (i.e. a DEX).
Polkadot is a project born in 2016 that aims to become a leader in interoperability and collaborative development between different blockchains. In fact, it features a hub-and-spoke system of interoperable and interconnected parachains to build an entire scalable and decentralized financial ecosystem.
Already since 2018, Bancor has expanded outside of Ethereum to offer exchanges with EOS and POA Network, but now it wants to build together with LiquidApps a real bridge with Polkadot.
A bridge between Polkadot and Ethereum
Currently, Ethereum dApps are unable to tap into the liquidity pools on Polkadot, and vice versa. In particular, decentralized exchanges are being built on Polkadot’s parachains that could allow for better performance, with faster and cheaper exchanges, but would need to be able to draw liquidity from DEXs on Ethereum.
Bridging will use LiquidApps’ universal interoperability solution, DAPP Network, and will allow Bancor to expand its liquidity pools by linking to dApps operating on Polkadot’s parachains, for rapid cross-chain exchanges between ERC20 and DOT tokens.
DAPP Network’s cross-chain bridge, created in September 2020, is already being used by Yup and DAPP Account DAO, which is a decentralized social media platform, and a cross-chain yield aggregator.
The CEO of LiquidApps, Beni Hakak, said:
“LiquidApps is proud to play a pivotal role in blockchain interoperability by collaborating with Polkadot and Bancor. By providing the underlying technology to empower this cross-chain bridge, we are helping to build the foundations for an efficient, scalable, and lasting decentralized ecosystem”.
Bancor’s CTO, Yudi Levi, added:
“Interoperability is crucial to the development of multi-chain DeFi and we’re thrilled to extend Bancor’s liquidity network to Polkadot with LiquidApps”.