Omnichain vs Multichain vs CrossChain: How Are They Different?

With the advancement of Blockchain technology, we have seen an increase in the number of Layer 1, Layer 2, and even Layer 3 blockchains. That's why you now hear and read about terms like Omnichain, Multichain, and Crosschain. 

Web3 developers have to take in many factors when developing a project, protocol, or dApp. By taking these terms into account, developers can understand the possible advantages and drawbacks of a particular solution. 

But before we breakdown these terms, we need to first understand interoperability. 

What is Interoperability?

Blockchain interoperability is the ability of blockchains to communicate with other blockchains. 

Interoperability is important for dApps that need to use different chains. Take DeFi for example. Users want to swap from one cryptocurrency to another. For the dApp to handle this function, it needs to communicate with both the blockchains in question. 

Multichain

A Multichain protocol or blockchain refers to project that uses multiple chains. The project exists across multiple blockchains and allows users to interact between the blockchains using the project. 

Projects that use Multichain make use of two layers. The consensus layer is responsible for keeping the all the different blockchains within the multichain system secure. 

Then we have the network's application layer. This programmable layer allows different individual blockchains with unique ecosystems to communicate with each other. 

Developers opt for Multichain solution because of the scalability, security, and cost benefits. 

Crosschain

In Multichain, project shared the same underlying security infrastructure. Crosschain, on the other hand, enables interoperability with a blockchain bridge. 

A bridge works in the following way. Users lock or burn cryptocurrencies on the original chain which unlocks or mints cryptocurrencies on the new chain. The bridge smart contract governs the entire process. 

The three Crosschain bridge mechanisms are "Burn and Mint", "Lock and Mint", and "Lock and Unlock". 

Omnichain

While Crosschain is great for Ethereum and EVM-compatible chains, it won't be of much use for products that use different Layer 1s such as Ethereum and Solana. 

Omnichain interoperability unlocks cross-chain composability. All decentralized apps reside atop disparate blockchain networks. 

LayerZero is an Omnichain interoperability protocol that enables multiple blockchains to communicate cross-chain effortlessly. 

The LayerZero protocol deploys smart contracts on each LayerZero Endpoint, each supported chain. These smart contracts link up all of LayerZero’s supported chains and can be easily deployed on new chains to include them into LayerZero’s network.