Dymension proposes new eIBC protocol for fast bridging between Optimistic Rollups

Modular blockchain network Dymension has published a paper proposing a new IBC-based protocol, eIBC (escrow-IBC), for fast and trust-minimizing bridging between Optimistic Rollups.

Optimistic Rollups have become the go-to scaling solution, but they come with two major drawbacks. The first is the fraud dispute window, which prevents instant token transfers with other IBC-enabled chains, hindering connectivity between rollups. The second is the Verifier's Dilemma.

A new protocol, eIBC (short for "escrow IBC"), aims to address both of these issues by using a specialized settlement layer, the Dymension Hub, as an escrowed open market for future receivables. The eIBC protocol enables users to transfer tokens from one RollApp to another via IBC, with Verifiers competing for the chance to earn a profit by fulfilling the token transfer instantly.

The eIBC protocol provides several benefits, including the near-instant completion of IBC transfers, Verifiers earning a profit post-dispute period, and the ability to reach any other RollApp chain immediately once the tokens are on the Dymension Hub. This makes the Dymension Hub the liquidity router of the RollApp network, in addition to its security provider status.