Klayr Interoperability

The Klayr interoperability solution allows blockchain to blockchain communication by using the paradigm of cross-chain certification.

Cross-chain certificates are a scalable and efficient solution that facilitates the transfer of all kinds of information between chains.

Basically, cross-chain certification means that information from one chain is authenticated and included in another chain utilizing a signed object called a certificate. This information is transmitted across chains by issuing a Cross-Chain Update transaction, aka CCU.

The CCU includes the certificate and the cross-chain messages coming from the sending chain. Cross-chain messages contain cross-chain commands which are executed on the receiving chain. This can mutate the state of the receiving chain in response to state changes that occurred on the sending chain.

In the diagram above, Alice performs a cross-chain token transfer from her account on the sending chain to Bob’s account on the receiving chain.

To achieve this, she sends a cross-chain token transfer transaction, t, on the sending chain. When this transaction is included, her account on the sending chain is debited.

Simultaneously, a corresponding cross-chain token transfer message, m, containing all the relevant information is emitted. This message is included in a cross-chain update transaction (CCU), which is sent to the receiving chain. When the transaction is included, Bob’s account is credited.

Cross-chain messages are, however, not limited to token transfers. Similar to transactions, cross-chain messages have a params property. Therefore, when building a Klayr application with the Klayr SDK, you can create custom cross-chain messages by defining the content of the params property as needed. For example, you could create a custom cross-chain message that contains some authenticated information from an oracle chain in its params property.

The cross-chain network topology is organized as a star topology and describes arrangements of blockchains within the Klayr ecosystem.^[3]

As shown by the image above, a Klayr blockchain can become interoperable with any other blockchain in the Klayr ecosystem including the Klayr Mainchain, simply by registering itself on the mainchain. All communication to other sidechains is routed through the mainchain.

As explained in section Cross-chain network topology above, the Klayr blockchain network is structured in two types of network participants:

In the Klayr ecosystem, sidechains are connected to each other via the mainchain. Because sidechains communicate through the mainchain with other sidechains, they only need to maintain one connection to the mainchain, which will significantly reduce both the complexity and the point-of-failure.

To become a sidechain in the Klayr ecosystem, a blockchain needs to perform the following two simple steps:

The mainchain forwards all cross-chain communication happening between registered sidechains in the network.

Let’s look at an example to illustrate the capabilities of the Klayr interoperability solution, and how sidechains can interact together.

In this case we are going to use an example with two functioning applications, and the steps of how interoperability can be achieved using this example are depicted in the illustration below.

Firstly, the Muzikie App is a decentralized music streaming platform that allows users to listen to music and podcasts from an ever-expanding list of audio files, whilst simultaneously supporting the artists with access to a fair and transparent economy. The Muzikie App is connected to the Klayr mainchain, and in order to function as a sidechain, the Muzikie App also has its own set of applications consisting of auditable, democratic, and futuristic solutions developed to manage music and its associated data. Furthermore, also connected to the Klayr mainchain is the Enevti App, a decentralized social media platform that enables users to create, manage, and trade their own NFTs.

In order to connect the Muzikie and Enevti sidechains, we can use a Cross-chain communication protocol that allows them to exchange data and transactions. For example, a user holding KLY tokens may decide to create an audio NFT on the Muzikie app, transfer it from the sidechain through the Klayr mainchain to the Enevti app, and then sell this NFT for ENVT tokens. Finally, that same user could then sell/convert their ENVT tokens back to KLY tokens. Conversely, it is also possible for KLY tokens to be converted/sold to ENVT tokens.

So to perform this action, the user would first have to sell/convert their KLY tokens to MZK tokens, then create an audio NFT. This would be followed by initiating the transaction on the Muzikie App, whereby the user defines the specifications/details of the audio file such as the name, description, genre, and more, including paying a network fee. Once the transaction is confirmed on the Muzikie sidechain, the audio NFT will be created and accessible for streaming to users with a valid subscription.

The owner may decide to sell their audio NFT on an NFT market. A good example would be the Enevti App. In order to achieve this, the user would have to specify the destination address, namely the user’s address on the Enevti sidechain, and the amount of KLY tokens required, including any transaction fees. Once confirmed, the NFT would be transferred to the Enevti App sidechain. The user could then list the NFT for sale on the Enevti App’s marketplace, and state the asking price in ENVT tokens. Once a buyer agrees and purchases the NFT and the sale is completed, the agreed amount of ENVT tokens would be transferred to the user’s Enevti wallet. Finally, the user could then convert/sell the ENVT tokens back to KLY tokens, at the current market price, which, for example in the future, could be achieved using a DEX application, and then transferred back to the Klayr wallet.

Example of interoperability between the Klayr mainchain and sidechains.