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Existing Challenges with Asset Transferring
The goal of the Kima infrastructure is to allow for the efficient and secure transfer of assets between blockchains.
At this time, there is no option to transfer original assets between blockchains. Instead, a user will deposit the original asset into a service (such as a cross-chain bridge) on blockchain A and receive a similar/matching asset at the address on blockchain B.
To do this, the user can:
- 1.Utilize the service of a centralized exchange (such as Coinbase) or an OTC desk, which will manage the exchange of asset A for asset B.
- 2.Use a cross-chain bridge, which creates a synthetic asset on blockchain B to match the original asset deposited on blockchain A.
- 3.Use a direct messaging service. Assuming the assets are natively available on two blockchains, a service or user can implement a smart contract that allows blockchain A to message blockchain B. Blockchain A would send a message once the original asset has been deposited on Blockchain A, and Blockchain B would then release the matching asset on Blockchain B.
We will go into the vulnerabilities and issues of these existing solutions in the following sections. Our position is that token-wrapping and cross-chain bridges only increase the liquidity challenges and lead to liquidity fragmentation across blockchains.