Most DLTs existing in the market suffer from fractionalization wherein data silos can’t communicate with each other.
Shimmer offers a solution by wrapping L2 assets with L1 native assets anchored in the base chain.
The IOTA Foundation introduced its Layer-1 staging network Shimmer last year in September 2022 and launched along with IOTA’s Stardust Tokenisation Framework Protocol Upgrade. The Stardust turns the Shimmer Network into a Tangle-based multi-asset ledger allowing everyone to mint their custom native tokens and NFTs.
Shimmer is a fully-functional network and allows the deployment of IOTA’s Layer 2 smart contracts, DApps, as well as Web3 capabilities in a testing environment before introducing them to the IOTA mainnet.
The good thing is Shimmer’s DAG base layer is absolutely feeless. Thus, all the native tokens and NFTs will inherit the same qualities and security features. This also means that any additional asset on Shimmer’s multi-asset ledger will be absolutely feeless and scalable.
Simmer is a one-of-its-kind solution in the market that shares the true ethos of a distributed ledger network while addressing the flaws among others. Twitter handle Dami-Defi has done a wonderful explanation regarding this in its detailed Twitter thread.
Shimmer is certainly not the first distributed ledger network to deploy multiple smart contract chains atop the base layer. However, when deployed on other platforms, these chains suffer from fractionalization. It means that they exist as data silos that can’t communicate with each other.
These bridges have certain drawbacks such as every individual bridge between chains needs to be coded, implemented, secured, and maintained separately. Thus, if one wants to interact with ten chains, one needs to build and maintain ten bridges. This not only requires a lot of commitment and effort but also is very expensive.
To transfer assets between chains, bridges also need to maintain large amounts of liquidity making them potential targets for cybercriminals.
Shimmer Offers the Solution to This Issue
Most bridges connecting smart contract chains are run as profit services, and thus they can have very high fees which can quickly add up as transactions happen across multiple chains and bridges. The Shimmer Network solves this issue by wrapping L2 assets with L1 native assets anchored in the base chain. DamiDeFi writes:
They inherit the feeless properties of the base Shimmer Network Tangle and are able to seamlessly interact using Layer 1 as a trustless, feeless, and secure cross-chain bridge.
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Thus Shimmer addresses the real-world problems of the bridge issues. Last year, bridge attacks were quite common in the decentralized finance (DeFi) space draining several hundreds of millions of dollars of investors’ money.
With its unique bride solution, the Shimmer Network can provide a fix to this. It would also help to boost more DeFi activity within the IOTA ecosystem in the long term.
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