Hyperlane: the first barrier-free layer to easily connect any chain

opening words

In the world of Web3, sharing data securely and easily across blockchains is key. To overcome interoperability challenges in the crypto space, bridging technology is crucial, connecting different blockchains to enable token exchange and liquidity enhancement.

Last month, combined transaction volume across all bridges exceeded $11 billion, underscoring their critical role in the industry.

Source: DeFiLlama

Cross-chain bridges do more than just transfer tokens; they enable a variety of operations across blockchains, from governance to launching new tokens to enhancing gaming experiences.

In particular, Any Message Bridges (AMBs) open up the possibility of transmitting various data, including tokens, contract execution, and NFTs, making diverse interactions between cross-chains possible.

We’ll look at Hyperlane, exploring its design, security, and the trust it builds within this ecosystem, and highlighting its role in advancing interoperability, scalability, and liquidity in the crypto space.

Market opportunities

Getting different networks to work together smoothly has always been a huge challenge. Typically, if developers want their new blockchain to communicate with other blockchains, they must go through a long and often uncertain process of getting permission from the teams that manage these connections. This way of doing things is often slow and can hinder growth, especially for newer or smaller projects that don't have much influence.

Hyperlane is changing the game by enabling anyone to connect to any blockchain network without having to wait for the nod from some gatekeeper. This approach is called permissionless interoperability, and it’s like opening the door to innovation. Now developers can quickly link their blockchain to other blockchains, speeding up the process and allowing them to focus on creating cool new things instead of waiting in line.

Source: Hyperlane

Additionally, Hyperlane allows developers to choose their security level. This is called Modular Security. Developers are no longer limited to a one-size-fits-all security setting, but can adjust it to perfectly fit their projects.

By making it so open and flexible, Hyperlane is paving the way for a future in which blockchains can easily communicate with each other, share information and work together. And it all happens in a way that gives the people building these projects the freedom to innovate and secure their jobs on their own terms.

Hyperlane project overview

Hyperlane stands out as the first barrier-free layer for easily connecting any blockchain. It allows developers to create inter-chain applications, simplifying the complexity of user interactions between chains on any connected network. Additionally, its flexible security options allow developers to customize it to their own security needs.

Additionally, Hyperlane comes with ready-to-use features such as Warp Routes for easily transferring tokens across chains, inter-chain accounts for initiating contract calls from one chain to another, and inter-chain accounts for accessing cross-chain information. Inquire.

Hyperlane is designed to be modular, enabling developers to manage their own security models through its inter-chain security modules.

Source: Hyperlane

- Breaking the Cycle with Open Interoperability

Here’s how the Hyperlane integration works:

1) Install the Hyperlane system on any supported virtual machine (currently available on EVM, with Solana VM, Fuel VM, CosmWasm and Cosmos SDK modules expected to be added by Q3 this year) without anyone’s approval

2) Set up security settings using its modular security module.

Hyperlane uses Interchain Security Modules (ISMs) for security. These smart contracts verify that messages sent to the destination chain do indeed originate from the source chain. Developers can choose to customize Mailbox's default ISM with application-specific ISMs to meet the specific needs of their applications.

Source: Hyperlane

3) By using Warp Routes, any asset can be easily transferred between any chain, bypassing the usual token whitelisting approvals required by traditional bridging technologies.

Warp Routes are Hyperlane’s way of making it easy to transfer ERC20 or ERC721 assets between any chain using Hyperlane without permission. They allow you to set up transaction routes between any chain and those that have been connected through Hyperlane.

Source: Hyperlane

4) Set up and manage your own Hyperlane validator or relayer.

Hyperlane validators operate independently, do not form a network with other validators, and submit transactions infrequently. They are set up for each specific source chain, with guidance provided for single-chain setups.

- working principle

Hyperlane’s new V3 version introduces post-dispatch hooks and includes cross-chain gas payment (IGP) as one of the necessary hooks. They are updating the documentation to reflect these changes.

Source: Hyperlane

Here’s the specifics of how Hyperlane’s mailbox smart contracts, which are designed to facilitate secure and efficient inter-chain communication, work:

Key Features::

● Send function: To start message sending, message content, destination chain ID and recipient address are required. Messages are stored in incremental Merkle trees within the mailbox to assist Hyperlane’s proof-of-stake protocol in verifying fraud proofs.

● Processing function: Promotes cross-chain message transmission, operated by relayers. It processes the message and any metadata defined by the relayer, forwarding this information to the recipient’s Interchain Security Module (ISM) for verification. After ISM approval, the mailbox delivers the message to the intended recipient through the recipient.handle() function.

In order to successfully send a message between chains, two transactions are required: one to send the message from the origin chain, and one to deliver the message on the destination chain. Hyperlane simplifies this process by providing an on-chain interface on the source chain. This allows the sender to pay directly to the relayer responsible for delivering the message on the destination chain, a fee known as a cross-chain gas payment.

The post-send hooks and cross-chain gas fee payments introduced in Hyperlane V3 are designed to enhance the functionality and efficiency of inter-chain communication, ensuring a more robust framework for blockchain interoperability and application development.

Team, basic support and strategic partners

Hyperlane was co-founded by Asa Oines and Nam Chu Hoai, who were early engineers on the decentralized finance platform Celo. In addition, Kol, who previously led venture capital operations at Galaxy, is also a founding team member. The company is located in Greenwich, Connecticut.

Hyperlane raised $18.5 million in a seed round led by Variant, with participation from well-known companies including Galaxy Digital and CoinFund. The funds will be used for recruitment, product development and security measures, including bug bounties and further audits, co-founder Jon Kol shared in an interview with CoinDesk.

In terms of partnerships, Hyperlane has successfully established some noteworthy partnerships in 2023 and early 2024. Some of these collaborations include:

● Circle’s CCTP and Hyperlane collaboration: Circle’s collaboration with Hyperlane enables the Cross-Chain Transfer Protocol (CCTP), which enhances USDC transactions across blockchains through features such as permissionless interoperability and modular security.

● Celestia + Hyperlane Instant Interoperability: Hyperlane’s collaboration with Celestia introduces instant, permissionless interoperability for Celestia rollups, providing developers with customizable security and asset support for easier integration and faster onboarding of liquidity.

● Hyperlane expands to Polygon zkEVM: Launching on Polygon zkEVM with permissionless deployment, Hyperlane brings advanced interoperability and asset bridging to the platform, demonstrating its commitment to crypto development in India and improving blockchain ecosystem connectivity sexual determination.

● Introducing Nexus: Powered by Hyperlane and Cosmos IBC, Nexus provides a unified interface for interoperability between Celestia, Cosmos and EVM chains, making it easy to move tokens and facilitating seamless liquidity access and cross- Ecosystem development.

● Injective ecosystem introduces Hyperlane’s inEVM bridge: Hyperlane’s inEVM bridge introduces permissionless interoperability to the Injective ecosystem, connecting it with Ethereum and preparing it for future expansion. This move simplifies integration across blockchains and promotes the adoption of decentralized applications.

● Hyperlane integrates with Skip protocol: Hyperlane and Skip protocol join forces to simplify cross-chain transactions and integrate Warp Routes into DeFi platforms and wallets through Skip API. This improves user experience, enables one-click transactions, and broadens access to unique inter-chain routing.

Competitive product analysis

Considering the basic functionality of Arbitrary Message Bridges (AMBs), many projects are actively contributing to this area. Some notable ones include LayerZero, Wormhole, and Axelar.

Shoulders

The Axelar network provides a secure, decentralized cross-chain messaging platform, making cross-blockchain EVM contract integration smooth. It stands out for its ease of use, multi-chain compatibility, cost-effectiveness, and secure, scalable architecture powered by efficient validators. Axelar connects the EVM and Cosmos chains and has strong community support and considerable financial support.

The network enhances cross-chain transactions through a solid infrastructure that meets both core functions and supports application development, ensuring comprehensive functionality and strong security through the IBC protocol and module isolation. Axelar is committed to building trust and security through external validator checks and balanced voting, with the goal of decentralized governance. Despite the challenges of adding new chains, Axelar's approach, including innovative voting and governance practices, aims to provide a scalable and reliable service for cross-chain communication.

LayerZero

LayerZero is a data messaging protocol designed for cross-chain communication, capable of transmitting lightweight messages between various blockchains with few assumptions. Its outstanding features include ease of development, cost-effective operation via off-chain oracles and relayers, and broad applicability to dApps. Backed by major crypto investments, LayerZero attracts major dApps and supports 11 chains, offering tools like LayerZero Scan to track transactions.

The protocol is architected around Endpoints for chain communication, leveraging Oracles and Relayers to deliver messages securely without the need for intermediary trust. Transactions are efficient, requiring gas only at the source, and the system ensures security through independent verification and a high attack threshold.

While LayerZero has a strong design and security mechanisms, its model involves challenges with decentralization, reliance on external actors to function, and the inherent security of the chains it connects to.

Wormhole

Wormhole acts as a bridge connecting at least fourteen blockchains (such as Ethereum, Solana), enabling cross-chain data and asset transfers through a decentralized "guardian" network. Its outstanding features include connecting non-EVM and EVM-compatible chains, guaranteed by reputable validators, and providing users with low-cost transactions.

The protocol operates based on Proof of Authority, with validators ensuring the integrity of cross-chain messages. Transactions require approval by a majority of guardians to be considered valid, facilitating secure and simple cross-chain interactions.

Wormhole has become a trustworthy platform in the cross-chain space, supported by strong institutional partners.

Hyperlane’s unique positioning

Hyperlane is uniquely positioned in that it aligns with the continued evolution of the crypto ecosystem, specifically toward modularity and permissionlessness to adapt to the dynamic needs of the market. Against this backdrop, Hyperlane has made significant progress in areas where other messaging protocols have struggled to balance.

However, this is also an area where the longevity of a protocol can greatly reflect its reliability and the trust built up over time. In this regard, other projects may surpass Hyperlane in some aspects.

Each bridge has its own unique design and method of validating cross-chain messages, which means they all have their own trade-offs that can sometimes come at the expense of security. As historical past bridge hacks have shown, even a small vulnerability can result in millions of dollars in losses. Given that any code in these protocols can contain vulnerabilities, and given that bridges are prime targets for hackers, it is critical for developers to prioritize ongoing audits and maintain bounty programs.

Currently, the cross-chain space is still in its infancy, with various design methods and consensus mechanisms being explored, and different protocols and dApps being experimented with in real time. For example, Injective is focusing on Axelar, Portal Bridge is leveraging Wormhole, and Stargate is leveraging LayerZero.

Hyperlane differentiates itself in adapting to the dynamic needs of the market by aligning with the continued evolution of the crypto ecosystem, especially towards modularity and permissionless. Hyperlane has made significant progress in areas where other messaging protocols have struggled to balance.

However, this is also an area where the longevity of a protocol can say a lot about its reliability and the trust it accrues over time. In this regard, other projects may surpass Hyperlane in some aspects.

Tokenomics

As of now, no exact details have been confirmed about the Hyperlane token, other than its role in the protocol’s proof-of-stake layer. Users may be able to stake the token to validate interchain messages and earn rewards for contributing to network security.

Bullish fundamentals

● Hyperlane’s vision is to provide a secure infrastructure for the safe development of inter-chain applications. This initiative is backed by a strong team and enjoys strong endorsements.

● With the recent rise in the crypto market, Injective has emerged as a leading project. Hyperlane enables seamless interoperability between various blockchain platforms, expanding the reach and efficiency of Injective’s dApps and assets. Combined with Hyperlane’s many partners and the buzz around potential airdrops, this could lead to wider adoption of the protocol.

● The Hyperlane ecosystem is expanding rapidly, with an increasing number of integrations starting in the first quarter of 2024.

Source: HC Capital

Bearish fundamentals

● The lack of detail in the token economics makes investment analysis of the project complex and difficult.

● Competing projects have already solidified their presence in the market, with monthly transaction volumes in the billions. While Hyperlane may have a strong start, it needs to establish its unique value proposition.

Conclusion

Hyperlane is emerging in the world of blockchain interoperability, proposing a strategy that is both decentralized and scalable. Its innovative modular messaging system, combined with a permissionless penalty mechanism, sets a new standard for solving challenges that have long plagued other messaging protocols.

It will be very interesting to witness the development journey of Hyperlane and the innovative applications it will enable.

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