The paradox of progress: Blockchain’s true breakthrough lies in its constraints | Opinion

Imagine a world where every country had its own internet—one for France, one for Japan, one for the U.S.—and none of them could talk to each other. Your emails wouldn’t be sent across borders, social media would be confined to your nation and global commerce. Just a multi-billion dollar innovative dream stuck in walled gardens. That’s exactly where blockchain is today.

The illusion of progress driving the innovation dilemma

Every technological revolution begins with an obsession: how do we push the boundaries of what’s possible? In blockchain, this has often meant faster transactions, cheaper fees, and higher scalability. But history tells us something different. Innovation rarely follows a linear path. Instead, the technologies that reshape industries don’t just expand; they redefine the very limits that constrain them.

Take the internet. Its early days were defined by walled gardens—AOL, CompuServe, and Microsoft Network. Each tried to build its own ecosystem, capturing value by restricting interoperability. But as the open web emerged, these walled gardens crumbled. The internet didn’t succeed because it removed constraints; it succeeded because it redefined them—creating protocols (HTTP, SMTP, TCP/IP) that enabled trustless, seamless communication.

Blockchain is at a similar crossroads. The obsession with scalability has led to fragmented solutions—rollups, sidechains, and alternative layer-1 blockchains—each solving a specific issue but adding complexity to the broader ecosystem. But in the rush to scale, we’ve overlooked one crucial element: connectivity.

The blockchain space wasn’t meant to be a collection of walled gardens, yet that’s what it has become. The consequences? A handful of key inefficiencies:

• Poor user experience: Try moving assets from Ethereum (ETH) to Solana (SOL), Bitcoin (BTC), or Cosmos Hub (ATOM). It’s like assembling IKEA furniture without the manual—doable but unnecessarily painful.
• Siloed innovation: Developers are building incredible applications, but many remain confined to a single chain. The result? Limited users, lack of adoption.
• Fragmented liquidity: DeFi applications struggle to operate across chains, and liquidity is fractured. Users have to jump through hoops (and multiple wallets) just to execute simple transactions. So, everyone sticks to chains that are within their operating comfort zone.

So, the real question isn’t just how to scale or manage the highest transactions per second but also how to rethink some fundamental constraints that define blockchain’s future.

The constraint that matters: Interoperability, not execution

As of 2024, there are over 120 L1 blockchains and dozens of L2 solutions. According to Electric Capital’s Developer report, the number of active developers across all blockchain projects grew by 60% in 2023, with new chains and solutions continuing to emerge.

Each blockchain has its own consensus mechanism, execution environment, and tokenomics operating with its strength within its silo. For instance, Ethereum utilizes the Ethereum Virtual Machine (EVM) and Solidity for smart contract development, while Solana employs a different architecture with languages like Rust. This diversity, while fostering innovation in their own ecosystem, creates significant barriers to seamless interaction between chains.

Interoperability between chains with such fundamental differences—in coding languages, virtual machines, and execution paradigms—requires more than just bridging assets. It means overcoming significant architectural and technological barriers.

And to solve these issues, we built bridges—literally.

The bridges we built… and why they keep breaking

Wrapped tokens, liquidity hubs, cross-chain messaging systems—each promised a seamless experience, but each came with trade-offs. Security vulnerabilities. Sluggish speeds. Cumbersome processes.

Bridges, in their current form, are like duct tape on a leaky pipe. They work—until they don’t.

The coding language differences and the lack of common virtual machines drive up the cost of building bridges and integration layers between blockchains. Every time a developer builds a cross-chain bridge or interoperability layer, they must account for:

1. Language translation: Converting between Solidity, Rust, or Bitcoin’s script is not only time-consuming but error-prone. In 2023, over 60% of active blockchain developers were working on interoperability solutions, spending an average of 1.5x more time troubleshooting and debugging cross-chain logic than single-chain applications.
2. VM compatibility: Bridging the EVM and Solana’s proof-of-history or Bitcoin’s script is far from straightforward. That’s because it’s not simply about moving tokens from one chain to another—it’s about ensuring that the logic behind decentralized applications is compatible across different execution environments.
3. Security risks: The more interoperability layers you introduce between different ecosystems, the more potential there is for vulnerabilities, as hackers have more entry points to target. According to a 2023 Chainalysis report, cross-chain bridges were responsible for over $1 billion in losses due to security breaches in 2022 alone—accounting for almost 70% of all stolen funds in the blockchain space. The complexities involved in making sure that cross-chain interactions are secure can drive up the cost of insurance, audits, and ongoing monitoring. In fact, blockchain projects are now spending an average of $200,000 annually on smart contract audits and cybersecurity solutions, up from $50,000 just two years ago.

Each of these hurdles drives up developer’s costs and ultimately results in a poor user experience due to higher gas fees, transaction times, and potential errors or failures in cross-chain applications.

So what’s the future? As Ethereum co-founder Vitalik Buterin put it:
“The future of blockchain is not about being the best in one area, but about being the best at working together.”

A new mental model: Composability builds interoperability

Interoperability is the enabler that has set the stage for composability.

Composability refers to the ability of various blockchain components—such as smart contracts, protocols, and applications—to interact seamlessly, enabling the creation of more complex and versatile functionalities. This modular approach allows developers to build upon existing components, fostering innovation and efficiency.

In the context of blockchain interoperability, composability ensures that dApps can operate across multiple chains. For instance, a DeFi application could leverage liquidity pools from different blockchains, offering users better rates and more options.

Because, at the end of the day, a fast blockchain is useless if it exists in isolation.

A presto. Driving off to building open highways.