Since the emergence of blockchain in 2008, we see a kaleidoscopic variety of applications built on distributed ledger technology (DLT), including applications for financial services, healthcare, or the Internet of Things. Each application comes with specific requirements for DLT characteristics (e.g., high throughput, scalability). However, trade-offs between DLT characteristics restrict the development of a DLT design (e.g., Ethereum, IOTA) that fits all use cases' requirements. Separated DLT designs emerged, each specialized to suite dedicated application requirements. To enable the development of more powerful applications on DLT, such DLT islands must be bridged. However, knowledge of cross-chain technology (CCT) is scattered across scientific and practical sources. Therefore, we examine this diverse body of knowledge and provide comprehensive insights into CCT by synthesizing its underlying characteristics, evolving patterns, and use cases. Our findings resolve contradictions in the literature and provide avenues for future research in an emerging scientific field.
Token economy instances can be built on a variety of protocols, such as distributed ledger technology (DLT) protocols. DLT protocols are used to operate DLT systems that perform, in a decentralized way, several tasks (e.g., the prevention of double-spending) that are usually handled by central actors, such as banks. Using DLT can be subject to challenges in terms of interoperability between DLT systems (e.g., due to incompatible interfaces), limiting the dynamics in token economy instances, for example, regarding collaboration between organizations operating on separate distributed ledgers. Cross-ledger interoperability (CLI) systems can connect DLT systems. However, it is unclear how the degree of decentralization (i.e., technical and political) of CLI systems affects token economy instances that comprise multiple DLT systems. To better understand such effects, we describe patterns for the implementation of CLI systems and present our notion of political decentralization in token economy instances using CLI. We describe potential implications of CLI patterns and governance mechanisms on token economy instances. Drawing from those implications, we discuss balancing centralization and decentralization in token economy instances that comprise multiple DLT and CLI systems.
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