[Analysis] Interoperability and composability within Ethereum - Linda Xie

Interoperability and composability are key features within the Ethereum network, states Linda Xie. Existing Ethereum protocols act as building blocks for a new suite of end-user applications, as developers can create applications that leverage multiple underlying protocols. This can expedite the development and bootstrapping process of new applications as well as expand the possibility of traversing different industries. For instance, Xie explores combining decentralized finance (DeFi) protocols with gaming and the resulting benefits:

Through adding DeFi to gaming we might be able to better understand incentives and marketplaces and through adding gaming to DeFi we might be able to make finance more accessible and interesting to different audiences. Communities that wouldn’t normally interact with each other will start communicating and sharing ideas which could lead to more innovation.

Protocol interoperability, however, compounds smart contract risk. If one smart contract contains a critical bug, it can impact any connected applications and user funds. But Xie believes a potential long-term solution could be “that centralized insurance companies will offer products insuring smart contracts and would employ smart contract auditors to review the code.”