# CrossDeFi: A Novel Cross-Chain Communication Protocol
## 3 Background
### Cross-Chain Components  
This subsection examines the integral components of cross-chain networks--bridges, decentralized exchanges (DEXs), aggregators, wrapped tokens, and oracles. Each component plays a distinct role in enhancing the functionality and efficiency of decentralized networks. Table 3 demonstrates these roles by comparing the components across various  
\begin{table}
\begin{tabular}{p{85.4 pt} p{113.8 pt} p{113.8 pt} p{113.8 pt}} \hline \hline
**Comparison Factors** & **Polkadot** & **Cosmos** & **Proposed CrossDeFi** \\ \hline Consensus type & Nominated proof-of-stake (NPoS) & Tendermint (BFT) & Varies based on DeFi system \\ \hline Core model & Relay chain & Bridge-hub model & Cross-chain strategy \\ \hline Interoperability level & Parachains-based & IBC-based & High among disparate DeFi blockchains \\ \hline Native token type & DOT & ATOM & Specific to each DeFi \\ \hline Scalability & Medium (sharding, parachains) & Medium (zones, hubs) & High \\ \hline Development language & Substrate (rust-based) & Cosmos SDK (golang-based) & Varies \\ \hline Ecosystem & Expanding with various projects & Growing with different projects & Depends on DeFi adoption \\ \hline Support for smart contract & Yes (via parachains) & Yes (via Cosmos SDK) & Varies \\ \hline Security type & Shared security & Tendermint consensus security & Specific to consensus type \\ \hline Cross-chain transactions & Bridges, parachains & IBC & DeFi asset-specific bridges \\ \hline Governance strategy & Polkadot council, referenda & On-chain governance, validators & Varies \\ \hline Upgradability & Supported & Supported & Supported \\ \hline DeFi support & Scalability, interoperability & Interoperability, finality guarantee & Asset-specific interoperability \\ \hline Transaction fees & High & High & Medium \\ \hline Speed & Medium & Medium & High \\ \hline Finality guarantee & Supported & Supported & Supported \\ \hline Asset-locking & Yes & Yes & No \\ \hline \hline \end{tabular}
\end{table}
Table 2: Comparison of Polkadot, Cosmos, and proposed CrossDeFi.  
factors, such as their primary focus, working principles, level of centralization, interoperability, security dependence, and specific use cases within the DeFi ecosystem.  
Bridges serve as critical infrastructure in cross-chain networks, facilitating the seamless transfer of assets between different blockchains while ensuring transaction finality and enhancing security. They are particularly vital in supporting the high-speed, accurate transfer of assets across heterogeneous blockchain platforms, making them indispensable for comprehensive DeFi solutions like CrossDeFi. Decentralized exchanges (DEXs) enable the trading of assets across different chains without the need for a central authority, thus supporting liquidity and lowering the risk of censorship. Aggregators play a role in optimizing transactions by pooling resources and routes across various DEXs to ensure users obtain the best possible trade executions. Wrapped tokens represent assets from one blockchain or another, allowing for the incorporation of diverse asset types into a single DeFi ecosystem without compromising the assets' native properties. Oracles bridge the gap between real-world data and blockchain networks, enabling smart contracts to execute based on inputs from outside their native chains.  
Each of these components, particularly bridges, contributes uniquely to achieving interoperability among heterogeneous blockchain networks. By leveraging the capabilities of bridges, CrossDeFi can overcome current limitations associated with traditional DeFi components, thereby unlocking new opportunities for cost efficiency, speed, and broad adoption across diverse blockchain-enabled DeFi systems.