Although the cryptocurrency space is growing fast, there are several hindrances to this growth, the major one being interoperability. The ability of blockchains to communicate with each other is limited. However, several projects are working overtime to fix this, one of which is the Router Protocol.
Here is how the Router Protocol is solving the blockchain interoperability problem.
What is the Router Protocol?
Router Protocol is a bridge that connects different blockchains and allows interactions to occur between them. The bridge is also extensible, which means can be further developed to include even more blockchains. Currently, the Router Protocol exists on the Ethereum mainnet.
With the Router Protocol, cross-chain liquidity transfer will be able to occur in just one transaction. A good example to elucidate the importance of the Router Protocol would be a user who has ETH on the Ethereum mainnet and wants farm yield on the Polygon blockchain.
The user would need to swap and bridge the ETH to Polygon and afterward deposit that (bridgeable) ETH into the protocol they want. This is a complicated process for the average user, not to mention the transaction fees involved. Router Protocol fixes this issue.
With the Router Protocol JS Software Development Kit (SDK) and the Crosstalk Library, cross-chain swaps are enabled directly in the Router Protocol app. For example, you can swap from native AVAX to native ETH in one swap.
The Router Crosstalk Library
The crosstalk Library is a framework that can be used by any decentralized application (DApp) to power seamless interactions across different blockchains. The developers of the Crosstalk library can build cross-chain DApps, such as lending marketplaces.
Moreover, developers can also port DApps to multiple blockchains, create stable coins that work across different chains, and integrate bridges in their DApps. Although the Crosstalk library is still in development, blockchain developers can use it on a testnet.
Router Protocol Roadmap and Tokenomics
Router Protocol has a native token called ROUTE. It has a total of 20,000,000 tokens, and 39% are already in circulation. Users who hold the ROUTE token will have governance power and will get a part of the transaction fees
The roadmap for the Router Protocol is quite interesting. They soon plan to launch on non-EVM chains such as Solana and Algorand. Further down the line, they will launch their own dedicated blockchain to host the Router’s infrastructure. They will also leverage the IBC module of the cosmos ecosystem to allow Router Protocol to integrate with the entire cosmos blockchain.
Backed by Coinbase ventures and Alameda Research, Router has partnered with several projects, including Gods of Africa, an NFT collection, and Trava Finance, to help them become the first cross-chain lending marketplace.
Vincent Munene is a freelance writer and a great blockchain enthusiast. Blockchain has changed his life in terms of financial freedom and in return, he likes to educate people and keep them up to date on everything blockchain. He is a Biochemist by profession and also loves to play the piano.