Sifchain Announces Peggy, Cosmos — Ethereum Cross Chain Bridge
Sifchain is proud to announce that it has successfully deployed a Peggy (Cosmos <> Ethereum bridge) on its Monkey Bars testnet. Sifchain is a cryptocurrency exchange protocol built on Cosmos SDK and will target 20–25 blockchains (such as Ethereum and Stellar) for cross-chain integration. It will also simplify the process of blockchain integration, lowering the development process for the Cosmos community so that additional cross-chain integrations will be cost minimized in terms of money and developer resources.
Sifchain’s goal is for new blockchains to consider cross-chain integration as essential as a wallet or block explorer. Liquidity from all cryptocurrencies can then be accessed on-chain, allowing the coordinated deployment of capital from all cryptocurrencies by DAOs.
Sifchain has deployed a persistent deployment of Peggy on a standing testnet, in parallel with Althea’s version of Peggy. Sifchain leverages the power of the Cosmos SDK to deploy a Peggy chain on mainnet. Sifchain uses Cosmos’ master branch Peggy with work created by a Swish Labs team under an Interchain Foundation grant. Like Althea Peggy, Sifchain’s approach to Peggy allows users of ETH and ERC-20 tokens on Ethereum to create pegged tokens on a Cosmos Network chain.
In both systems, an Ethereum user can send tokens from their Ethereum wallet to a Peggy smart contract running on Ethereum. Peggy validators observing the Peggy smart contract keep those Ethereum tokens in a lockup group and mint a corresponding allocation of pegged tokens to a user’s Cosmos Network wallet address.
The difference in the two lies in their cryptoeconomic security model. Althea Peggy uses a Proof of Authority model in which users accept the credibility of a select set of pre-ordained validators that operate the Peggy bridge. A cross-chain transaction is verified if the pre-ordained validators declare it valid above a certain threshold.
Althea Peggy Documentation: Validators are fully trusted to manage the bridge. Validator powers and votes are replicated on the Ethereum side so trust in bridge assets depends entirely on trust in the validator set of the peg zone chain. This has known problems where the assets in the bridge exceed the market cap of the native token. We accept these known issues in exchange for the dramatic design simplification combined with acceptable decentralization this design provides.
By contrast, Sifchain uses a Peggy deployment with a Staked Threshold model in which Peggy validators stake collateral to secure the bridge and they are subject to slashing as per Tendermint consensus rules on both the Cosmos SDK chain and the Ethereum smart contract side of that bridge. This solves the aforementioned cryptoeconomic security issue on the bridge. In exchange for being subject to slashing, validators earn a service rate. Althea trades off trust minimization in exchange for simple design whereas Sifchain trades off simple design for maximizing trustlessness supported by cryptoeconomic incentives.
You can find details on Peggy’s implementation here: https://github.com/Sifchain/peggy/blob/develop/docs/sifchain-peggy-architecture.md
Note that Sifchain will likely launch its mainnet or at least a betanet with some live cryptocurrency before IBC is ready for production. In that case, it would use a modified architecture as per this ADR in which Peggy was deployed directly onto Sifchain instead of having its own peg zone validator set. Some of Sifchain’s validators would simply have Peggy admin privileges similar to Althea Peggy.
Peggy and Cosmos Network
We see Peggy’s deployment as a hallmark moment for growth of the Cosmos Network. With Peggy and IBC, Ethereum users will be able to use their ETH and ERC20 tokens on Cosmos SDK platforms such as Kava, Akash, Terra, e-Money, IRIS, Secret Network, and of course, the Cosmos Hub. Cosmos Network users will also be able to use their tokens on Ethereum and take advantage of its dapp network. Cryptocurrency holders on both sides will be able to take advantage of the benefits of one chain while holding a position on a token native to another, bringing us one step closer to Sifchain’s mission of connecting liquidity on all blockchains.
Calls to Action
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Sifchain Announces Peggy, Cosmos — Ethereum Cross Chain Bridge was originally published in Cosmos Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.