What Is The Blockchain Transmission Protocol?
The Blockchain Transmission Protocol (BTP) is a decentralized communication system that allows data sharing and token transfer across blockchains seamlessly.
This is an alternative interoperability solution to other methods, such as relay blockchains (on Polkadot, $DOT) and external oracles (on Chainlink, $LINK).
The main BTP crypto project is Icon, $ICX, created by Min Kim from Parameta in 2017 (formerly known as Iconloop).
“The purpose of BTP is to enable complex cross-chain applications with smart contracts residing on two or more blockchain networks with as few security sacrifices as possible.”
– MoonKyu Song
How Does BTP Work?
To communicate two different blockchains, the BTP follows these steps:
- User transfers: Users request sending data or tokens from Blockchain A to B from a platform that supports the BTP (such as the Icon Bridge).
- Message Relayers: BTP nodes monitor the transfer on both blockchains. Before passing it to the other node group, they verify signatures, timestamps, formats, and other message details.
- Message Verifiers: Once chain B nodes receive the message, they follow similar checks to verify its integrity and validity.
- Service Smart Contracts: Once the message is valid in the destination blockchain, both chains run smart contracts (autonomous programs) to transfer tokens. The user “loses” them on chain A and “recovers” them on chain B.
BTP for Token Exchanges
To understand the exchange process, here are the components involved:
- BPT-enabled Bridges: The Icon network has token-transfer platforms (or bridge dApps) on every supported chain (including Ethereum, BnB chain, and others). Users connect and start transactions in a similar way to decentralized exchanges.
- Light clients: Unlike full nodes, light clients are efficient, miniature versions of a blockchain accessed by BTC smart contracts. BTP light nodes hosted in Blockchain A hold copies of Blockchain B and vice versa.
- Bridge smart contracts: Different transfer systems (e.g., lock-unlock, burn-and-mint) exist for bridges since they’re still experimental.
As a simplified example, a user decides to transfer $USDT with the BTP from the BnB Chain to Ethereum:
- Connect to the BTP platform on BnB Chain
- Request the $USDT transfer to Ethereum
- Pay the smart contract activation fee to confirm
- Receive $USDT in the Ethereum chain
Diverse Applications of BTP
BTP is still in development, with various use cases coming soon:
Cross-Chain Token Transfers
BTP presents a more reliable and trustless way to transfer tokens across networks without manual validation. This means users can quickly send tokens to incompatible blockchains via BTP.
However, this requires light clients to update their blockchain copies constantly and can make transactions expensive.
Cross-Chain Arbitrage
Cross-chain arbitrage is the manual/automated trading practice of reselling the same asset on different networks and at different prices. Price differences are likely to occur for trading pairs and networks with low liquidity and high trading volume. With the BTP, arbitrageurs could finally trade them, leading to fairer prices for other traders.
NFT Digital Identity
The main benefits of non-fungible tokens (NFTs) are transferability and data resilience. Normally, it would be limited to its native blockchain, but BTP could make it identifiable to others.
For example, users could access different privileges in Web3 platforms with a BTP NFT identity— without buying another one in the second blockchain.
Conclusion
As new blockchains appear, interoperable technology becomes more valuable. Although experimental, BTP is a more trustless alternative to central relay chains and oracle services.
Smiley, S., Vorwald, C., Solomon, E., Shin, E., & Song, M. (2022, June 2). Blockchain Transmission Protocol: A brief introduction. Icon.community.
https://icon.community/assets/btp-litepaper.pdf
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