A new report by the R&D lab at the crypto startup TenX is in today’s ethereum news for testing the cross-blockchain interoperability protocol that allows transferring the ERC20 tokens for BTC by using the Lighting Network.
According to the report, the test was conducted in order to exchange ERC-20 tokens that run on the ethereum network and they rely on the smart contracts for easier ownership transfer, for Bitcoin’s Satoshi, the smallest possible unit able to transact by using the Lightning Network’s second layer protocol.
The lightning network is one of the most successful solutions for the biggest problem bitcoin has-scalability. The method uses Hashed Timelock Contracts (HTLCs) so they get the ability to open payment channels between users that keep their transactions off-chain.
The previous Ethereum HTLC CoBlox was much more simple and it involved native assets. CoBlox noted that their approach is to split the HTLC into two transactions: ‘’contract deployment’’ and ‘’ERC20 transfer call’’ but end up not being able to combine the two.
In the report you can read that:
“The ERC20 transfer function uses msg.sender for authentication. However, calling transfer from a contract deployment sets msg.sender to the address of the yet to be deployed contract which obviously has no tokens!”
CoBlox noted that using the Lightning Network for atomic swaps allows the users to create invoices and pay them instantly but they also point out that the atomic swap can’t always be expressed with this model.
They are still looking for other possible solutions to resolve this issue and this is one of the reasons they haven’t included the results of the PoC for the ERC20 tokens.
DC Forecasts is a leader in many crypto news categories, striving for the highest journalistic standards and abiding by a strict set of editorial policies. If you are interested to offer your expertise or contribute to our news website, feel free to contact us at [email protected]
Discussion about this post