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An R&D lab at crypto startup TenX has demoed the use of its cross-blockchain protocol to transfer ERC20 tokens for Bitcoin (BTC) using the LN.
An R&D lab at crypto startup TenX has tested the use of its cross-blockchain interoperability protocol to transfer ERC20 tokens for Bitcoin (BTC) using the Lightning Network (LN). The news was reported on R&D lab CoBlox’s blog today, Dec. 12, in reference to the demo on Dec. 7.
As the blog post outlines, the technical challenge was to exchange ERC-20 tokens — which run on the Ethereum (ETH) platform but are not strictly “native” since they rely on invoking a smart contract to transfer ownership — for Bitcoin’s smallest transactable unit, known as “Satoshi,” using the second-layer scalability LN protocol.
Lightning Network is a second-layer solution to Bitcoin’s scalability issue, which uses Hashed Timelock Contracts (HTLCs) to open payment channels between users that keep the majority of transactions off-chain, turning to the underlying blockchain only to record the net results.
CoBlox’s previous Ethereum HTLC, as today’s post explains, was significantly simpler as it involved native assets. CoBlox has outlined their approach to find a solution for an ERC20 case, stating that the developers decided to “split the HTLC setup into two transactions” — “contract deployment” and “ERC20 transfer call” — but that they could not combine the two steps.
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