Chain Fusion Technology: The Key to a Multichain Ecosystem

As a developer, how often do you find yourself struggling to integrate multiple blockchain networks for a single decentralized application? Perhaps you’re managing assets on Ethereum, serving frontends from IPFS, and handling smart contract computations on Arbitrum or Optimism. Each network demands you to adapt to different programming models, transaction costs, and settlement times. The process is cumbersome, inefficient, and complex.

Do you worry that this fragmented approach hampers innovation? That the extra effort required to manage multiple blockchains could be better spent on improving your dapp? What’s more is that this fragmented landscape is cumbersome to a developer building a product.

It also creates a very isolated experience for consumers and end-users. This could be in the form of high transaction costs or a lengthy process because of incompatibility between different blockchains. Maybe you’ve experienced delays and unexpected costs while transferring assets between Ethereum and Bitcoin. Or you may have struggled to access services hosted on multiple blockchains seamlessly.

Imagine a platform where interacting with dapps and different services within is smooth and intuitive. Everything from one single environment.

ICP’s Chain Fusion technology makes this possible.

Chain Fusion, Live

Today, components of Chain Fusion — native Bitcoin integration, Ethereum and EVM integration are already live. The technology behind it was designed to make the complex world of multichain interactions more accessible and simple.

What do we mean by Chain Fusion?

Fusion is a process where multiple elements are joined or fused together to form a single entity. With Chain Fusion, we fuse different blockchains together to drive value creation to other chains and the ICP ecosystem. This directly allows smart contracts to interact with multiple networks enabling developers to realize multichain use cases and profit from ICP features.

Chain Fusion on ICP refers to the ability of canister smart contracts to sign transactions and interact bi-directionally with other blockchains without relying on a single point of trust. The direct bidirectional interaction is possible as ICP canisters can read the state of other blockchains and write (sign) transactions to other chains without any intermediaries. This is made possible with chain-key cryptography and threshold signing, but more later.

Overall the technology allows developers to leverage the best elements of each network which has otherwise proven to be a difficult or insecure approach. Users can engage with dapps without having to manage complex multi-chain wallets or navigate between different platforms. For instance, an Ethereum-based dapp can process Bitcoin payments through ICP smart contracts, providing a unified user experience.

Why use the Chain Fusion tech to build or enhance your dapp?

The tech stack of Chain Fusion allows developers to create powerful dapps by fusing together the components and unique capabilities of different chains. For the first time, developers can experience the benefits of building on a unified environment with greater flexibility. Here are a few benefits that the Chain Fusion environment offers:

• Take advantage of ICP’s unique capabilities. If you have a dapp, you can leverage ICP’s powerful features without migrating your smart contract or dapp to ICP. So a developer can augment smart contracts on other chains with ICP superpowers. This includes capabilities like HTTPS outcalls, timers, and event responses, enhancing your application’s functionality.
• Cross-chain environment but without vulnerable bridges. Chain Fusion allows direct flow of information and value across different chains. What differentiates the technology is that it does not depend on the vulnerable architecture of cross-chain bridges to facilitate the transfer.
• Offload heavy tasks and computations. With Chain Fusion, your dapp or smart contract can now offload heavy or expensive compute tasks to ICP without having to migrate your dapp or use an insecure solution. Just standard cryptographic signatures.
• Removes complexities with on-chain orchestration. With orchestration tools, developers can design smart contracts that automatically interact with multiple blockchains. An ICP smart contract can orchestrate the transfer of tokens between chains, ensuring that assets are moved securely and efficiently.
• Easy to integrate and deploy. Developers can write smart contracts that address cross-chain interactions without the need to learn multiple programming languages. And users? Users can enjoy a streamlined experience that feels like interacting with a single, cohesive ecosystem.

How does Chain Fusion work?

Chain Fusion combines technological advancements to enable secure read and write capabilities on other blockchains.

To start with there are two types of integration:

• Native integration — This type of integration refers to a bidirectional interaction at the protocol level. The BTC<>ICP is a type of native integration. This means that nodes of other chains run alongside ICP nodes. Canisters can directly read the Bitcoin blockchain state and sign Bitcoin transactions.
• RPC integration — ICP’s integration with Ethereum and other EVM-compatible networks is made possible through the EVM RPC smart contract canister on ICP. This canister communicates using an on-chain API, making the developer experience much simpler. It allows for seamless interaction with networks like Arbitrum, Optimism, and Base, which helps developers easily create cross-chain applications.

Another crucial element is the secure signing mechanisms of Chain Fusion.

• Threshold signing — ICP features a suite of threshold signing protocols, secure mechanisms where private keys are generated in shares across nodes of a signing subset. This approach ensures that no single node has access to the entire key. Hence, no single node can ever compromise the security of the assets.

How are projects leveraging Chain Fusion tech?

ChainKeyX uses the tech stack to bring Bitcoin into DeFi. More specifically, the integration allows to bring traditional banking services on-chain with Bitcoin at its core. Users can activate DeFi over BTC through lending and borrowing without going through a centralized platform. Through a flexible liquid staking model, users can stake their Bitcoin and earn different interest rates depending on how long they stake it. They are also in complete control over their assets and can choose to unstake their assets whenever they want.

Loka Mining, a meta layer with a native yield protocol for Bitcoin built on ICP, offers a trust-minimized approach to Bitcoin miners unlocking key benefits for Bitcoin holders, miners, and investors. For Bitcoin holders, Loka Mining allows them to leverage their BTC to earn native yield from the Bitcoin mining economy. Secondly, for Bitcoin miners, Loka provides the opportunity to sell their future mining rewards. And for investors it offers the chance to buy Bitcoin at a lower-than-market price. By participating in the Loka Mining’s ecosystem, investors can essentially purchase Bitcoin at a discounted rate, thanks to the ability to acquire future mining rewards at a reduced price.

Explore the entire Chain Fusion ecosystem:

ICP Ecosystem | Internet Computer

Learn more about Chain Fusion and start building :

CHAIN FUSION - Unifying Web3 experience | Internet Computer