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SoK: Communication Across Distributed Ledgers

March/2021, To appear at: Financial Cryptography 2021

Enabling secure communication across distributed systems is usually studied under the assumption of trust between the different systems and an external adversary trying to compromise the messages. With the appearance of distributed ledgers or blockchains, numerous protocols have emerged, which attempt to achieve trustless communication between distrusting ledgers and participants. Cross-chain communication (CCC) thereby plays a fundamental role in cryptocurrency exchanges, sharding, bootstrapping of new and feature-extension of existing distributed ledgers. Unfortunately, existing proposals are designed ad-hoc for specific use-cases, making it hard to gain confidence on their correctness and composability.

We provide the first systematic exposition of protocols for CCC. First, we formalize the underlying research problem and show that CCC is impossible without a trusted third party, contrary to common beliefs in the blockchain community. We then develop a framework to evaluate existing and to design new cross-chain protocols. The framework is based on the use case, the trust model, and the security assumptions of interlinked blockchains. Finally, we identify security and privacy challenges faced by protocols in the cross-chain setting.

This Systematization of Knowledge (SoK) offers a comprehensive guide for designing protocols bridging the numerous distributed ledgers available today. It aims to facilitate clearer communication between academia and industry in the field.