Newly Developed Gateway Protocol Looks to Allow Token Exchanges between BCH and ETH

Blockchain Technology 1 min, 48 sec READ

by Chris Madill

A new open-source protocol promises to improve the interoperablility of the global blockchain ecosystem by allowing cross-chain token exchanges

A new open-source protocol known as the Open Federated Gateway Protocol (OFGP) has been developed to help crypto-users complete transactions between public blockchains. The new OFGP was developed by iBitcome, a mobile wallet provider, and DEx.top, a decentralized exchange, and promises to improve the interoperability of independently developed blockchain networks.

At present, the first blockchain built on the OFGP is called “Mallow” and is used to allow cross-chain transactions between the Bitcoin Cash (BCH) and Ethereum (ETH) blockchains. Exchanges are executed via the creation of a temporary digital token, called “Wrapped” Bitcoin Cash (WBCH). This WCBH token is pegged to the value of Bitcoin Cash, and a simple explanation of how the process is executed is found in the OFGP whitepaper,

[t]he basic operation from BCH to ETH is to transfer a certain amount of BCHs to the specified multi-signal address on the BCH chain. The corresponding gateway will go to the contract on the ETH chain to deposit the specified account with the corresponding amount of tokens. The contract's token and BCH are permanently pegged to a fixed ratio.  / Open Federation Gateway Protocol

iBitcome and DEx.top hope that more opportunities for cross-chain transactions will be created through the open-source nature of their newly developed protocol.  The companies encourage developers to create new gateway solutions between blockchains, and they believe that the continued development of these gateways will not only lead to more transparency in the crypto marketplace, but will also create opportunities for increased efficiency and transfer speeds.

As more blockchain companies explore the idea of “tokenization”, new cross-chain solutions are popping up to help facilitate token exchanges. Last week, a Spain-based company called shEOS announced the development of their new cross-chain protocol solution. Their EOS21 protocol allows the “teleportation” of ERC20 tokens to the EOS blockchain without any loss of functionality, and destroys the original ERC20 token in the process, effectively moving the token from the Ethereum ecosystem to the EOS ecosystem.