# CrossDeFi: A Novel Cross-Chain Communication Protocol
## 3 Background
### Cross-Chain Solutions  
As the variety of blockchain assets in the DeFi system expands, numerous cross-chain networks continue to emerge. Notably, Polkadot and Cosmos are widely utilized for their robust capabilities; however, they both face challenges with transaction costs and speed, which are significant concerns for DeFi applications. Cosmos: This platform constructs the \"Internet of Blockchains\", enabling diverse blockchains to share data and interact seamlessly to achieve interoperability [45]. In Cosmos, each blockchain operates independently--akin to its own universe--minimally connecting globally without cross-chain bridges. This setup reduces the need for networks to compete intensely, allowing multiple blockchains with unique characteristics and specialized use cases to coexist. Cosmos employs the Tendermint consensus protocol, which is notable for immediate transaction finality--once transactions are included in a block, they cannot \begin{table}
\begin{tabular}{l l l l l l l l l l l} \hline
**Cross-Chain-** & \multirow{2}{*}{**Interoperability**} & \multirow{2}{*}{**Compatibility**} & \multirow{2}{*}{**Scalability**} & **Asset** & **Asset** & **Bridging** & \multirow{2}{*}{**Performance**} & **Finality** & **Complexity** & **Cost** \\
**Solutions** & & & & & & & & & & & \\ \hline Hash-locking & No & No & No & Yes & No & Low & No & High & High \\ Ethereum & Yes & No & No & Yes & Yes & Yes & Medium & No & Medium & High \\ Binance-Smart Chain & Yes & No & No & Yes & Yes & Yes & Medium & No & High & High \\ Polkadot & Yes & No & No & Yes & Yes & Yes & Medium & No & Low & High \\ Cosmos & Yes & No & No & Yes & Yes & Yes & Low & No & High & High \\ AucSwap & Yes & No & No & No & Yes & Yes & Medium & No & Medium & High \\ Zendoo & Yes & No & No & Yes & Yes & No & Medium & No & Low & High \\ Terra & Yes & No & No & Yes & Yes & Yes & Medium & No & High & High \\ Solana & Yes & No & No & Yes & Yes & Yes & Low & No & Low & High \\ Avalanche & Yes & No & No & Yes & Yes & Yes & Low & No & High & High \\ Warped Bitcoin on & Yes & No & No & Yes & Yes & No & Low & No & High & High \\ Ethereum & Multi-token standards & Yes & No & No & Yes & Yes & Medium & No & High & High \\ Notary mechanism & Yes & No & No & Yes & Yes & No & Medium & No & Low & High \\ Sidechain or relay & Yes & No & No & Yes & Yes & No & Low & No & Medium & Medium \\ Asset transfer protocol & Yes & No & No & Yes & Yes & Yes & Medium & Yes & High & Medium \\ \hline \end{tabular}
\end{table} 
Table 1: Comparison of existing cross-chain works. be reversed. Despite these advantages, Cosmos struggles with high transaction costs and slower speeds, impacting its effectiveness in the DeFi landscape. Polkadot: A third-generation blockchain technology, Polkadot focuses on interoperability and scalability [41]. It facilitates seamless interoperability through a network of self-governing blockchains, known as parachains. The core of Polkadot's architecture is the relay chain, which handles transaction validation and security across all parachains, ensuring a high level of security and consistency. Polkadot also allows developers to create application-specific blockchains as parachains tailored to their specific needs. However, it does not adequately address asset-locking issues crucial for DeFi-enabled solutions. Table 2 compares the proposed CrossDeFi solution with existing solutions from Cosmos and Polkadot across various factors like consensus type, core model, interoperability level, scalability, and more. This comparison highlights the specific areas where CrossDeFi aims to improve upon the foundations laid by Polkadot and Cosmos, particularly focusing on interoperability, finality guarantee, and optimized transaction costs and speeds within the DeFi sector. It is evident that existing solutions, such as Cosmos and Polkadot, primarily focus on interoperability and scalability. In contrast, the proposed CrossDeFi is specifically designed to enhance interoperability among heterogeneous DeFi platforms and ensure transaction finality within the DeFi ecosystem.