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Co-authored-by: Evan Gray <56235822+evan-gray@users.noreply.github.com>
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Since the launch of Bitcoin in 2009, the cryptocurrency and decentralized computing ecosystem has rapidly evolved and expanded. The ecosystem now includes hundreds of blockchains, often also referred to as **Layer 1s**.
Prior to 2015, blockchain transactions were limited in their capacities, typically being used to transfer funds from one user to another. This changed with the intoduction of Ethereum and smart contracts. Smart contracts allowed developers to perform arbitrary on-chain computation as part of a blockchain transaction, opening the door for blockchain technology to become a global computing platform. These innovations laid the groundwork for the creation of **Decentralized Applications** or **Dapps**.
Prior to 2015, blockchain transactions were limited in their capacities, typically being used to transfer funds from one user to another. This changed with the introduction of Ethereum and smart contracts. Smart contracts allowed developers to perform arbitrary on-chain computation as part of a blockchain transaction, opening the door for blockchain technology to become a global computing platform. These innovations laid the groundwork for the creation of **Decentralized Applications** or **Dapps**.
Now, a rich ecosystem of Dapps exists across an array of smart-contract-enabled blockchains. These Dapps provide a number of services across categories like:
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However, Dapps are not without limitations, many of which are tied to their underlying blockchains.
Two notable limitations are that blockchains have no access to off-chain data and no mechanism to interact with other blockchains. These limitations have lead to a fractured ecosystem where each blockchain is closed off from the others by default. That means assets native to one chain are not accessible on another, and some services can't be leveraged on particular chains altogether.
Two notable limitations are that blockchains have no access to off-chain data and no mechanism to interact with other blockchains. These limitations have led to a fractured ecosystem where each blockchain is closed off from the others by default. That means assets native to one chain are not accessible on another, and some services can't be leveraged on particular chains altogether.
Blockchain developers are now aiming to solve these interoperability problems to create a unified ecosystem. In this new cross-chain ecosystem, people can move beyond being users of individual blockchains and take advantage of Web3 on a broader scale.

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# Blockchain Interoperability
Because blockchains are siloed by nature, individual cryptocurrencies being bound to their own chains has been a longtime limitation of blockchain technology. The first attempt at solving this problem was the creation of cryptocurrency exchanges like Coinbase and Binance. Today these are refered to as centralized exchanges (CEXs).
Because blockchains are siloed by nature, individual cryptocurrencies being bound to their own chains has been a longtime limitation of blockchain technology. The first attempt at solving this problem was the creation of cryptocurrency exchanges like Coinbase and Binance. Today these are referred to as centralized exchanges (CEXs).
Centralized exchanges play an important role in cryptocurrency, but they are not a complete solution for blockchain interoperability for two primary reasons: (1) they're centralized, which is counterproductive to creating a decentralized platform, and (2) they deal only with tokens.
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- Bridges are capable of being decentralized in theory, but are often quite centralized in practice.
- Bridges are currently the only way to hold a token on a chain other than its 'native' chain. If you're holding ETH on a chain other than Ethereum, it is, by definition, a wrapped token.
- Bridges are all mutually incompatible with eachother. Using multiple bridges just makes 'double wrapped' tokens.
- Bridges are all mutually incompatible with each other. Using multiple bridges just makes 'double wrapped' tokens.
- If tokens have become double wrapped after traversing multiple bridges or blockchains, there can be a complex unwrapping process to get back to the original token.
This explains how the ecosystem arrived at its current state -- CEXs are a solution to siloed blockchains, DEXs are a simple response to CEXs, and DEXs have created a demand for bridges. Each solution in this timeline is an ad-hoc patch to the previous problem, and the current landscape of fractured liquidity, double wrapped tokens, isolated userbases and wallet incompatibilities is the result.

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To mitigate this, multiple relayers can be run in order to provide redundancy either by (1) the xDapp team or (2) a decentralized network based off economic incentives. _However, creating a robust model for decentralized relaying is generally application-specific and complex._
Overall, Specialized Relayers add a backend component that is responsible for liveness, but can simplify the user experience. It's generally recommend if your goal is a highly-polished user experience, and you want to have better control over message delivery.
Overall, Specialized Relayers add a backend component that is responsible for liveness, but can simplify the user experience. It's generally recommended if your goal is a highly-polished user experience, and you want to have better control over message delivery.
# Generic Relayers