Blocknet XRouter — A Comparison of Interoperable Protocols

7 min readMar 24, 2021

XRouter solves the issues surrounding blockchain interoperability and scalability, advancing Blockchain 3.0 technology and opening up the gates to mainstream blockchain adoption.

XRouter is a layer 2 TCP/IP blockchain solution allowing interoperability between ALL blockchains with the additional ability to also connect to non blockchain infrastructures so that an ecosystem of blockchain connected oracles can be built. XRouter forms a part of the Blocknet Protocol. This is a major milestone for blockchain as Blocknet has now made available the world’s first truly decentralized blockchain router, allowing developers to utilize on-chain data and services from public and private blockchains without needing to have any of them installed, as well as being able to utilize off-chain oracle data, API’s and services. XRouter lays the foundation for multi-blockchain architectures, real DeFi, on-chain/off-chain cohesiveness and an “Internet of Blockchains”.

Understanding the differences between blockchain 3.0 solutions

There are various Blockchain based networks and projects all trying to solve the issues surrounding Blockchain interoperability; the ability for blockchains to interact and “talk” to one another as well as the ability to communicate with non-blockchain systems. As Blockchain technology has evolved three broad categories have emerged when it comes to Blockchain interoperability projects:

Transfer of information (Blockchain and non-blockchain)
Financial exchange
Application platforms

Various projects are trying to address the issues surrounding Blockchain interoperability but in a limited way, usually only trying to solve just one of the three categories above. For example Loopring is focused on financial exchange for Ethereum while Chainlink is focused on building a decentralized oracle network and Polkadot are building an interoperability platform. Blocknet does all three. XRouter, along with XBridge and XCloud form The Blocknet Protocol, a truly decentralized all encompassing system of blockchain interoperability. But the protocol is not limited to just Blockchain-to-Blockchain interoperability. XRouter can also connect to non blockchain systems and infrastructures. This allows for the creation of oracles that can transmit real world information into blockchain networks such as weather data as demonstrated here. Lets first focus on the transfer of information between blockchains.

1. Transfer of information (Blockchain and non-blockchain)

Many projects are working to achieve this but in truth, what they are achieving architecturally are only internal or centralized blockchain ecosystems, and they are doing so in ways that centralize interchain communication around centralized “hubs” or around a central chain using the “Hub and spoke” model as the template. Projects such as Aion, Cosmos, Polkadot and others have taken this approach. For example, in the Cosmos hub and spoke model, blockchain must connect to the Cosmos Hub via the spokes or “zones”. Polkadot connects blockchains using a relay chain as a central connector. These relay chains or “parachains” serve the same purpose as Cosmos zones and both systems use the hub and spoke model. This means that to connect to these systems usually requires special access and users are forced to use Local Area Networks rather than TCP/IP. This is more like an Intranet of blockchain rather than an Internet of blockchains and is not a chain agnostic “self-sovereign” approach. History has shown us that this approach is likely to result in a Blockchain turf war. Cast your mind back to the early days of the Internet; back then there were many data transport communication protocols all fighting for supremacy. Apple first used the AppleTalk protocol and AFP over a DDP transport, but soon migrated to IP transport instead. Another example was Novell who abandoned their SPX/IPX protocol and moved to the TCP/IP protocol because of consumer demand for a protocol that was open to everyone. The fact is, had these companies not moved to the TCP/IP, everyone using and building on these protocols would have been left behind. The reason TCP/IP won is because anyone can talk to anyone else and TCP/IP does not privilege one website over another.

The “Hub and Spoke” model has been likened to the Sun and the Solar System with lesser bodies orbiting around a main central body. But why limit oneself to just a single “solar system”? To carry on the analogy, if the “Hub and Spoke” model is like the Sun and the Solar System then the Blocknet Protocol and XRouter can be likened to the whole Universe where free travel between Blockchains in ANY Solar System is possible, not just one!

Had the internet developed in a similar manner, only allowing developers to build within the confines of a restricted system, the internet would have not evolved into the wonder that it is today. Blocknet has built an unopinionated connector of Blockchains that does not force users to build on a single platform, hub or middle chain and unlike the “Hub and Spoke” model, Blocknet does not preclude other projects from connecting to XRouter; indeed, it may be beneficial for other projects to do so, so as not to limit themselves to their own eco-systems. This collaboration may lead to a stronger, wider-reaching “Internet of Blockchains”.

2. Financial exchange

On the second topic of financial exchange the Blocknet Protocol could not be more suited and prides itself on having built the most decentralized exchange in existence. Blocknet understood that by building on top of a decentralized interoperability protocol, rather than adjusting a pre-existing system that still requires additional centralized components instead of being an inherent part of it, half the race was already won and that true decentralized trading could only be achieved if the four core components of trading were ALL decentralized. So why is this important? Why is decentralized financial exchange so vital? Simply put, it is the safest, most not-restrictive way to exchange cryptocurrency. Decentralizing the four components above is the only way to ensure that funds are in users control at all times and that decentralized financial exchange is open to everyone. In early 2019, Blocknet launched Block DX. Built on the Blocknet Protocol (the XBridge part of the protocol handles the exchange), Block DX is a completely decentralized and trustless exchange dApp that mimics a centralized exchange experience and enables traders to conduct exchanges directly from the wallets of the coins being traded. Using cross-chain atomic swaps via the Blocknet Protocol, a trustless, direct wallet-to-wallet exchange is achieved, thus eliminating the need for trust in a third party and making the loss of user funds impossible. Funds are in your possession at all times, and you trade directly from your own wallet with no account creation, no third parties, no trading pair limitations, no listing fees and all on a decentralized (P2P) orderbook. This is important because the intricacies of what constitutes the decentralized exchange of cryptocurrencies has become muddied recently due to the actual language surrounding decentralization becoming compromised, confused and even hijacked by projects who want to use the term ‘decentralized” as a mere buzz word as a quick and easy way to appear “cool”. Cosmos for example, only allows for the exchange of tokens that have joined its hub and does not allow for atomic swaps. Unless tokens can be atomicly swapped cross-chain and the four components of decentralized exchange are met, then anything else is not decentralized. Many of these projects later proved themselves to be merely hybrid projects due to their own actions or legal pressure. For example Crypto Bridge billed themselves as a decentralized platform but succumbed to legal pressure. In a truly decentralized system, this could not have happened.

3. Application platforms

Regarding application platforms, various projects such Polkadot are creating their own interoperability platforms, but herein lies a problem. True interoperability should not even require a “platform”. When businesses and developers choose a single platform to build on, this typically precludes the use of other technologies. Users must select a single platform and succumb to vendor lock-in. XRouter mitigates this risk because it is the only chain-agnostic interchain solution, and nothing prevents it from interoperating with any and all other blockchains and blockchain interoperability projects as there are no middle chains or hubs. Unlike projects such as Cosmos, The Blocknet Protocol allows decentralized applications (dApps) to be built without the requirement of a “platform” to do so. As mentioned above the first dApp to be built on the protocol was Block DX but this is just the tip of the iceberg in what can be achieved. With XRouter developers can concoct “Blockchain cocktails’ mixing and matching whatever Blockchains they like. For example, a secure I.D system, perhaps using Digibytes DigiID to allow dApps to connect to a Blockchain of the developers choice so the dApp could have cryptographically verified identification. Or if creating a dApp on Ethereum, storage functionality may be required. Because Ethereum doesn’t intrinsically handle file storage very efficiently, XCloud (of which more about below) and XRouter could be used to interact with SiaCoin to utilize its storage functionality. Basic plugins to connect Sia to all other blockchains have already been built as can be seen in this demonstration. Many more use cases can be seen in the Blocknet Whitepaper.

To learn more about the Blocknet DAO and XRouter protocol, view the XRouter docs or join the community on the official Discord server.

About the Blocknet

The Blocknet is a decentralized network that connects blockchains, similar to how the internet connects computers. Whether it’s through cross-chain dApps or using the protocol as a 2nd layer to index blockchains, the Blocknet provides developers with the capability to create the applications of tomorrow.