Market Opportunity

A view on the market opportunity for cross-chain interoperability

Very active space despite the "crypto winter"

The blockchain ecosystem is a vibrant, active space despite the recent "crypto winter." With over 160 different chains in existence, the need for better interoperability within this vast landscape is becoming increasingly pressing.
The rise of cheaper and more efficient L2 chains has amplified the demand for cross-chain interoperability, especially as the Total Value Locked (TVL) on different blockchain networks reaches $50 billion (down from all-time-high TVL of $250 billion in December 2021). Notably, around 60% of this value is currently locked on the Ethereum chain.
% of TVL on different chains
Although Ethereum accounts for the majority of TVL, most of the daily unique active wallets (dUAW) and dApps are found on other chains.
This asymmetry between TVL, dApps activity and dUAW has led to a growing need to bridge funds cross-chain. Recent data reveals that the monthly transaction volume on the top 18 cross-chain bridges amounts to $8 billion. Furthermore, the number of users bridging from Ethereum to L2 chains has surged by a whopping 155% compared to last year.

Cross-chain bridges are prone to massive hacks

One of the key issues of cross-chain bridges is high security risks and hacks. According to Chainalysis, a total of $2 billion in cryptocurrency was stolen from 13 different cross-chain bridge attacks. Most of these thefts have occurred in 2022 and make up 69% of the total funds stolen in 2022. This presents a major challenge to building confidence in blockchain technology.

Competitive landscape: a lot of whitespace in the integrated segment

When it comes to competition, there is a lot of whitespace in the integrated segment. Although there are many players in the space enabling users to swap or bridge funds across chains (such as centralised or decentralised exchanges and cross-chain bridges), only a few tackle the problem from an integrated standpoint within websites or dApps.
Non-exhaustive list of main players in the market