R3’s Corda Releases Ethereum-Based XDC Bridge for Interoperability
Corda, a decentralized blockchain offshoot of software company R3, recently announced that it had built a decentralized bridge to permissionless blockchains on the Ethereum ecosystem.
XDC To Facilitate Exchange On Corda
The announcement sees them collaborate with permissioned hybrid blockchain protocol eXchange inFinite (XinFin) to improve the global trade finance space. XinFin's utility token XinFin Digital Contract (XDC) would be used for payment settlement in the Corda network.
The interoperable bridge built by a team of former Royal Bank of Scotland (RBS) employees designated LAB577 will make the Corda blockchain talk to other blockchain networks. This will greatly engender the transmission of private user data on the Corda network. The limited dataset will also make its way to the XDC secure network.
In a press release shared with us, Director of the team Richard Crook noted the importance of this Corda-XinFin interoperable bridge, saying that one of the blockchain's trilemma would be put to bed.
“The first currency across is XDC, but this lays the groundwork to connect Corda to ERC-20s and other cryptocurrency networks.”
“What you would see here is the age-old challenge of interoperability being solved.”
R3 has been in the crypto space for some years. During its inception in 2015, the R3 team pointed to the potential blockchain technology like Bitcoin would bring to the financial sector. Even though large financial houses initially signed up for the project, fears about competitors getting their hands on company data saw interests wane.
This led to the creation of Corda- a system that enables data and value transfer between parties without giving out vital data. The Corda project has been hugely successful, and they created a payments platform that supported Ripple Labs' XRP token in 2018.
KYC Will Come To XinFin
This innovation joins a growing number of new generation interoperable blockchains. Cosmos, a permissionless blockchain platform on the Ethereum network, recently launched its Inter-Blockchain Communication Protocol (IBC).
Crook noted that the XDC-powered bridge between Corda and other DLT-based platforms would incorporate more inter-chain enabled assets in the coming months.
But even as the blockchain protocol values decentralization, XDC co-founder Atul Khekade notes that the platform ensures that regulatory guidelines are being followed.
Khekade said that all intending validators would need to undergo regulatory know your customer (KYC) protocols to be eligible. This will see them lock 10 million XDC tokens (valued at $300,000) to become a validator, and they must duly attach a KYC node to the network.
The need for regulatory goalposts is increasing by the day as the crypto industry continues to attract institutional demand. A growing number of criminal elements have become attracted to the crypto space, forcing global regulatory bodies to clamp down on crypto activities in some regions.
Like the US Securities and Exchange Commission (SEC), regulatory agencies have since directed crypto-facing businesses to incorporate necessary security protocols obtainable in the traditional financial space.