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IBC

Generally, when we describe something as “interchain” we mean that it is connected to the broad network of IBC-enabled blockchains. “Interchain” is more specific than “cross-chain,” which describes any interfacing between unrelated blockchains. It is also different than “multi-chain,” which describes any network of multiple blockchains. IBC can be understood as a universally implementable cross-chain infrastructure for a multi-chain ecosystem.

Inter-blockchain communication (IBC) is central to Quasar. At its core, IBC is essentially a standard for setting up a bidrectional stream of communication between independent blockchains. It is not exclusive to Cosmos SDK based chains, but currently has the most compatibility and adoption with PoS chains utilizing Tendermint's fast-finality based consensus built with the Cosmos SDK. Like TCP/IP or TSL protocols, IBC functions primarily by sending packets and receiving acknowledgments. Relayers use off-chain processes to open connections between chains. Light clients are used to interface with IBC on each side of a connection, tracking consensus states and using proof specifications to ensure data provided is not malicious. Each blockchain that engages in a connection must actively track each other and provide each other Merkle proofs. Cosmos SDK based chains can use native transfer modules to link into predefined ports which then send packets and acknowledgments across channels once a connection is established between relayers and light clients. Each side of the relay uses the light client of the other chain to quickly verify incoming messages. Relayers do not have access to the contents of packets, and light clients have limited access to state machine blocks. These features ensure that establishing connections is secure and not resource-intensive.

Vaults and their associated strategies use the Inter-Blockchain Communication Protocol (IBC) to deploy assets across connections with disparate blockchains.

IBC implementation is specified in the form of Interchain Standards (ICS) which offer definitions for IBC components and their use. With these standardized abstractions, any chain that fulfills a minimal set of prerequisites can incorporate IBC components and enable access to the IBC network.

Key to the functions of Quasar Vaults and Strategies are the Fungible Token Transfer, Interchain Accounts, and Interchain Queries standards.

  • Fungible Token Transfer [ICS-20]: This standard makes possible interchain token transfers that enable Quasar Vaults to securely operate with a variety of assets. It specifies a data structure for token transfer packets and preserves token fungibility and ownership in a permissionless manner. This allows the transfer of tokens across IBC-enabled chains, preserves their essential function, and tracks the source chain of a transferred token. ICS-20 extends CW-20 standards for interoperability across protocols with unique tokens.

  • Interchain Accounts (ICA) [ICS-27]: This standard unlocks the ability for users on one chain to execute actions on other chains, such as sending and receiving funds or accessing data streams. It makes possible deposits from multiple blockchains and permits the Quasar protocol to carry out strategies on the behalf of Vaults on several foreign blockchains. An interchain account exists on a receiving blockchain designated as a host chain, which listens for incoming packets containing information and instructions to be executed on it. Directions for an interchain account are sent from a controller chain. Instead of signing transactions with a private key, as is the norm in single-chain interactions, a controller chain sends IBC packets containing the necessary instructions and proofs to the host chain. From there, the host chain is able to authenticate and execute an incoming message on its state machine while remaining fully sovereign.

  • Interchain Queries(ICQ)[ICS-31 TBD]: This standard unlocks the capacity to query data, such as values and balances, from external chains over IBC channels. Vaults depend on the ability to know the price of assets on other blockchains; with Inerchain Queries, Vaults are able to do this. Quasar, along with Polymer Labs and Strangelove Ventures, has contributed significantly to the development of this ICS. You can read more about this standard on our Medium page, where we go into greater detail and share technical details on how to initiate queries from a custom Cosmos SDK module.