Ethereum Classic (ETC) is about to come full circle with it to return to ethereum’s blockchain after it split-off in 2016.
A so-called peace bridge is now in its final stages with ETC soon to be tokenized as a TETC unique token on ethereum’s blockchain.
#PeaceBridge ETC-ETH Bridge Nears Completion!
— Ethereum Classic (@eth_classic) March 1, 2019
The overall design appears somewhat simple with a semi-trusted set-up. A Custodian creates a smart contract on ETC’s blockchain where you lock the coins. A minting smart contract is created on ETH’s blockchain where TETC is “printed.”
To get eth to know what’s going on in ETC or vice versa, we have a Proof of Authority (PoA) network with some complex cryptoeconomics.
An authority or a trusted entity, say KyberNetwork, effectively approves the basic functions of whether TETC does in fact correspond to ETC and thus can be transferred to someone else. Likewise they approve withdrawals of ETC.
The custodian, say Kyber, has to put down a stake, so if they misbehave a challenger can provide proof and if successful can take their stake.
“At any point, the existence of more than one Custodian-signed transaction at the same nonce and for the same token can be submitted to DepositContract to prove the Custodian’s illegal double-sign,” the project says.
We could not find a whitepaper to more clearly explain just how exactly eth’s blockchain knows how much ETC has been deposited or how one can prove the TETC amount does in fact correspond to the ETC deposited amount.
Both, however, are public blockchains so one can easily manually verify correspondence, but the custodian smart contracts are upgradable, so there is some trust involved.
The end result is a transformation of ETC into effectively just another eth-based token. Something criticized by some ETC supporters, like former ETCDev member Donald McIntyre who says:
“Bridges, wrappers and collaborations are a net negative for ETC as it blurs its positioning as people don’t understand the difference between ETH and ETC, and all other smart contracts platforms for that matter…
As ETH is 30x larger and has more money for communications, it is the only one that benefits from those actions because it sucks the little network effects from ETC.”
Current ETC devs seem to disagree with their official account publicly stating in response:
“Blockchains help us minimize the need for trust. ETC has ‘huge potential’ because of its functionality, secure consensus mechanism, and fixed monetary policy.”
ETC holders might benefit from gaining access to ETH’s vast ecosystem while ETH would probably benefit from increased network effects as by having eth you can then access any other tokenized crypto through needing nothing more than a MetaMask plugin.
That would allow for decentralized exchanges between any tokenized cryptocoin whether bitcoin, soon ETC, and perhaps at some point even Doge.