# Distributed Ledger Technology Review and Decentralized Applications Development Guidelines
## 4 Interoperability Tier  
By launching various domain-specific DLT applications for public use, each addressing different requirements, one problem that arises is the need for an interoperability protocol or mechanism. It should facilitate the transition from isolated DLT applications to networks of integrating DLT applications. Such a network could further unlock the potential of the DLT by allowing different types of businesses or applications to leverage on a different type of DLTs. Moreover, they will coexist and cooperate by sharing their ledgers. The state-of-the-art solutions for DLTs integration are mostly referring to the blockchain ledgers [7]. Due to the development of a high number of blockchain platforms and applications, their interoperability is the main technological trend in the next years [135]. The most popular ones such as Ethereum, Bitcoin, or Hyperledger use different data formats and data interchange solutions making their integration difficult [136]. For example, Interledger [137] developed a protocol for allowing communication across different blockchain ledgers by using payment channels. The mechanism is called \"AtomicSwap\" and uses routes existing in the Lightning Network. Considering a hop that has Receiver and Sender channels opened on two networks, such as Bitcoin and Ethereum. Upon a transfer, the hop can agree to update its Bitcoin balance from the Receiver channel, in return for Ether on the Sender channel. Most state-of-the-art interoperability solutions are addressing the transfer of coins from a parent blockchain ledger to a secondary one. Two-way peg systems [122] are mostly used for this type of Ledger-to-Ledger communication. The transfer is achieved by temporarily locking some coins on the parent blockchain and then unlocking the same amount of coins on the secondary blockchain. The transacting process is executed on the secondary chain until the user decides to return to the main chain. This is possible by repeating the same process on the secondary chain, thus locking the coins on the secondary chain, and then releasing them on the main chain. A central exchange that needs to have access to both chains is proposed as a solution for implementing the transfer of coins between two blockchain ledgers [123]. A user sends a request from the main chain specifying the number of coins and the address that should receive the coins in the secondary chain. The exchange can then simply send the same amount of coins to the specified address on the secondary chain. The central exchange needs to be a trusted entity; otherwise, the money could be easily stolen from the two chains. To address this issue a MultiSignature scheme can be used [138]. In this case, any transaction must be approved by N out of M participants, instead of relying on only one entity. It still relies on a middleman, but the risks are significantly reduced. The entangling of the chains is presented as a potential solution for coin transfer between blockchain ledgers. It uses a secondary chain to monitor the main chain and includes all the block headers in the main chain blocks [139]. As a result, blocks from the secondary chain will have two parents: the previous block from the secondary chain and the last mined block on the main chain. The main disadvantage of this approach is that the main chain needs to create blocks at a lower rate than the secondary chain. An entangled model is used by BTC-relay that connects the Bitcoin chain with the Ethereum chain [140]. After every 10 min, proof of the last mined block in Bitcoin is provided in the Ethereum smart contract. Each time a user wants to prove the validity of a Bitcoin transaction on the Ethereum chain, it only needs to provide the Merkle Path of the transaction and the block it is contained in (a Simplified Payment Verification (SPV) proof [141]). The sidechain solution for coni transfers aims to eliminate the middleman. The interoperability protocol of the chains implements a new way of unlocking coins, which is _proof of a locked transaction on the other chain_.