Buterin claimed that stablecoins might allow users to shift value across different blockchains in a lengthy Twitter chat on May 20:
There are a lot of things that could be done but aren’t in the case of issuer-backed stablecoins, for example, every stablecoin could be an immediate cross-chain bridge!
Udi Wertheimer, a Bitcoin (BTC) activist and independent developer, pointed out that cryptocurrency exchanges currently allow for something similar to what Buterin suggested. He explained that a customer can deposit the Ethereum version of Tether’s USDT on Binance and withdraw the Omni protocol or Tron (TRX) version immediately.
Buterin, on the other hand, stated that he would welcome a bridge that does not require the user to use an exchange to move funds:
Of course, it would be fantastic if they, USDC, and the others could agree on an uniform API (maybe a “bridge contract” ERC) so that I don’t have to deal with Binance accounts to move coins around!
Decentralization is unimportant to users
While industry insiders like Wertheimer and Buterin prefer decentralized solutions, users don’t care how systems work as long as they’re linked, according to Wertheimer.
On the other side, Tether’s chief technical officer Paolo Ardoino believes that lack of interoperability is a problem that affects all digital tokens. He further proposed that other parties, not stablecoin producers, should design a solution to address this problem:
The stablecoin is issued by Tether. There are already a number of projects aiming to solve this issue. This is a widespread issue that affects all coins on all blockchains. […] Tether is now advising projects that are attempting to address this issue. […] As a result, we have a say in the process. We simply aren’t working on the solution ourselves.
A difficult solution
The most difficult aspect of designing an interoperability standard, according to Ardoino, is gaining a complete grasp of the security implications of each blockchain involved.
The episode earlier this month, in which a non-custodial Bitcoin to Ethereum bridge shut down just two days after its launch owing to a flaw, demonstrates the complexity of establishing interblockchain bridges.
The obstacles of establishing interblockchain bridges, according to Jagdeep Sidhu, a co-founder and main core developer at Syscoin, which established a Syscoin-Ethereum bridge at the end of January:
It’s easier for projects to make trade-offs in order to get solutions to market faster, or to base core interoperability on market-driven trading mechanisms or liquidity providers, only to discover multiple flaws later, or to find that enterprise adoption is hampered by regulatory and legal requirements.
Syscoin would “very definitely” be interested in working with stablecoin issuers to build its bridge, according to Sidhu. Third companies interested in bringing USDT to new blockchains, on the other hand, are free to do it independently, according to Ardoino:
Tether is based on public blockchains, and communities can create and use cross-chain goods to move Tether between chains. That is what makes it so appealing.