On Wednesday, June 8th, UniLayer Network has launched its Testnet during Consensus Week 2022. The event was hosted by Blockchain New York, you can watch it here , plus sign up for our newsletters and get ready for the public demo of testnet.
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The UniLayer Network development team, which includes whitehat hackers from the auditing firm Smart State, has been working diligently to innovate our layer-1 (L1) Testnet. Now, the time has finally come to push the code and give it a test drive.
Our team of tech experts is comprised of 5 Core Devs, 2 DevOps and our CTO. We are building non stop and constantly working on bringing to life the next versions of TestNet.
The cross-chain logic of our L1 Testnet is poised to solve a significant pain point for the blockchain community today: secure interoperability between multiple chains. In this blog, we’ll take a look at why UniLayer’s solutions are such a huge step in creating true interoperability.
Why UniLayer is Necessary Infrastructure for a Multi-Chain Ecosystem
Due to scalability issues on Ethereum, users and decentralized applications (dApps) have spread out across multiple blockchains over the last year and a half.
At the end of 2020, around 95% of the transactions in decentralized finance (DeFi) were finalized on Ethereum. Today, Ethereum’s dominance in DeFi has dwindled to 65% of the total value locked (TVL) in DeFi smart contracts, with the rest spread out over a growing number of blockchains.
According to DeFi Llama, there are currently over 100 different networks where users can participate in DeFi, NFT markets, and numerous other use cases that rely on blockchain technology.
As more users are onboarded to various blockchains, and as more use cases emerge that are built on blockchain technology, it’s becoming increasingly necessary for information to be shared across different chains.
However, each of these blockchains supports a security layer that makes it difficult for different networks to interact and share data. Nowadays, multiple chains are necessary for scaling operations without jeopardizing the security that gives blockchains their utility, but the problem is that this robust security prevents chains from easily sharing data.
Current Multi-Chain Solutions are Inefficient and Lack 100% Secure Interoperability
The adoption of blockchain technology has taken off in recent years, and there are more users and developers turning to blockchain technology than ever before. All of this new traffic leads to congested networks, and so far the only solution has been to move traffic onto multiple networks and layers.
As a result, information stored on multiple L1 and L2s creates data silos, since the security of each blockchain prevents information from flowing between networks. For DeFi, this means liquidity becomes fractured across networks in a sub-optimal and inefficient system that has, at its height, accounted for over $250 billion in TVL.
In order for DeFi, which is just one major use case for blockchain technology, to meet its potential as a multi-trillion dollar global financial system, there needs to be a way for liquidity to seamlessly move across multiple chains.
Solutions developed to help port liquidity or report information from one chain to another, such as token bridges and oracles, have witnessed spectacular hacks recently. In fact, just two exploits in cross-chain bridges account for nearly a billion dollars worth of assets compromised.
If the future of blockchain technology necessitates a multi-chain environment, then there needs to be a secure way to facilitate interoperability between chains. To that end, the UniLayer Network has been developed to unite all layers of blockchains using our revolutionary cross-chain logic.
UniLayer is Breaking Through the Blockchain Communication Barrier
A blockchain’s security depends on its validators achieving consensus through various mechanisms such as Bitcoin’s Proof-of-Work model or Solana’s Proof-of-Stake (PoS).
Reaching consensus is necessary for validators to finalize transactions on a network, and every blockchain reaches its own consensus in a different way. Besides consensus mechanisms, there are other computations in a blockchain’s design that factor into what is known as its on-chain logic.
Every blockchain operates according to its own chain logic, which we can compare to a language spoken in a neighborhood that only one blockchain knows.
As blockchain technology grows in importance and more industries begin using different chains, it becomes increasingly necessary for UniLayer to securely translate these languages for a more connected and global blockchain community.
It’s the year 2022, but in blockchain terms, we’re in an era that predates long-distance calls. Imagine if businesses today could only call other businesses and customers in their neighborhood–that’s a huge problem UniLayer is working to solve.
What is UniLayer Network’s Cross-Chain Logic and How Does It Work?
The UniLayer Network is an L1 blockchain uniting a divided blockchain world. Our solution embeds master nodes into every blockchain we interact with, and this allows UniLayer Network to validate transactions between chains natively, on our own chain.
In other words, the nodes of other chains become UniLayer’s nodes, and UniLayer is not only capable of speaking multiple blockchain languages–it stores other blockchains’ memories as well.
By embedding nodes, UniLayer becomes a part of other blockchains, and other blockchains become a part of UniLayer. As a result, all of the data stored on other blockchains can be validated on UniLayer as though it was also UniLayer data.
This is a major step forward for multi-chain solutions. UniLayer operates with complete certainty about the state of each blockchain it interacts with, something a smart contract or oracle cannot do by itself.
UniLayer can cross-reference and validate “snapshots” of other blockchain states via its own sets of validators. Then, the final state of a transaction between Chain A and Chain B, which has been finalized on UniLayer, is reported to each chain, and the transaction is stored in a block generated on UniLayer.
The transaction is completed when changes in state are communicated to Chains A and B in their own logic. With Unilayer’s cross-chain logic, users can access liquidity and swap tokens on multiple chains as though they were transacting on a single L1.
UniLayer’s Testnet Launch Builds the Foundations for Future Scaling on Mainnet
Our Testnet launch is a major step in UniLayer’s roadmap. Once the Testnet goes live, the foundations will be set for our rapid deployment on multiple chains, and by 2024 we will have integrated over ten major chains.
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The Testnet will launch running six master nodes. You can interact with the UniLayer Network by downloading a UniLayer wallet and acquiring ULR, UniLayer’s native token securing our Delegated Proof of Stake (DPoS) consensus mechanism, from the Testnet faucet.