Multichain Meaning

Multichain refers to the paradigm where multiple blockchains coexist and interact, as opposed to a "Maximalist" future where one single chain (like Bitcoin) processes all the world's transactions. A "Multichain Application" is a DApp that has deployed its smart contracts to multiple networks (e.g., Aave is on Ethereum, Avalanche, and Polygon), allowing users to access its services regardless of which chain they prefer.

The rise of the multichain thesis is driven by the need for scaling. No single blockchain can currently handle the throughput of the global economy without becoming prohibitively expensive.

By spreading activity across multiple chains-some optimized for security, others for speed or low cost-the entire ecosystem can scale horizontally. However, the multichain world introduces security risks, primarily at the "Bridges" that connect these networks.

Bridge hacks have been responsible for billions of dollars in losses. As a result, the industry is slowly moving toward "Cross-chain" or "Omnichain" interoperability standards that attempt to secure the communication layer between these diverse networks.