Picasso Introduces Groundbreaking IBC: The First Sub-layer Solution on Solana’s Network

Cross-Chain DeFi with the Power of Inter-Blockchain Communication

7 min readApr 26, 2024

The blockchain era has come a long way since the enigmatic Satoshi Nakamoto, unveiled Bitcoin to the world. That singular act planted the seeds of a decentralized financial revolution, a vision of value transfer unencumbered by intermediaries.

Yet, over the years, the realm of blockchain has become segmented. Competing blockchains have risen as giant walls, limiting the flow of assets and innovation.

Picasso, powered by the ingenuity of Composable Finance, is poised to be a key bridge-builder in this new decentralized landscape. By unlocking unprecedented cross-chain interaction with Solana, famous for its lightning-fast speeds and low transaction costs, Picasso offers a gateway to the potential of truly interoperable DeFi (decentralized finance).

The significance of IBC and the possibilities this opens for Solana enthusiasts.

The focal point of this narrative revolves around Solana Inter-Blockchain Communication (IBC).

IBC is an end-to-end stateful protocol enabling secure, ordered, and authenticated communication between two non-related blockchains. It enables two separated blockchains to communicate bidirectionally and asynchronously in a reasonably short time frame.

The following is a demonstration of Composable’s Solana <> IBC connection

In contrast to conventional bridges that frequently depend on centralized entities or intricate wrapping mechanisms, IBC offers a resilient standard for linking various blockchains. Its architecture emphasizes security and smooth communication, facilitating the exchange of not only tokens but also intricate data between two distinct chains.

IBC is currently the only viable mechanism for permitting trustworthy cross-chain communication.

Before an IBC exchange can occur, a “four-phase handshake” must be meticulously completed. This ensures that both chains agree on protocol versions, features, and each other’s state of validity. These are essential guardrails against errors or potential exploits. A blockchain must:

Init
Try
Ack
Confirm

Additional technical requirements imposed by the IBC on chains that it connects are that the ledger needs to:

Provide a Smart Contract runtime with transactional state changes
Support light clients and state proofs.
Provide block timestamps.
Support introspection including a view of past block hashes.

This is precisely where Solana faced a fundamental hitch — its design did not natively generate the state proofs that many IBC-compliant chains utilize. Thankfully, this is where Picasso’s innovation shines.

The “Guest Blockchain” Solution: Picasso’s Secret Art

To enable this IBC handshake with Solana, Composables’ team, along with its collaborators at the University of Lisbon, devised a groundbreaking solution: the Solana “guest blockchain.” Like a layer 2 on Solana, “guest blockchain” works as a smart contract residing within Solana. Its core purpose is to mimic the IBC requirements that Solana doesn’t natively meet.

The figure illustrates the sequence of steps to send a message between blockchains | Source: Miguel Matos, 0xbrainjar.

Think of this guest blockchain as a translator: validators on this guest blockchain diligently observe Solana’s transactions and, with that data, construct blocks on the guest blockchain that mirror Solana’s activity. This guest chain becomes a reliable bridge for IBC’s protocols. Notably, it’s the guest blockchain that ultimately handles the handshake with other IBC-compliant chains, allowing trustless communication to be established between networks of very different designs.

Re-staking SOL with Solana Guest Blockchain: New Yield Opportunities

Just like any blockchain operating under a Proof-of-Stake (PoS) model, this Solana guest blockchain needs its own network of validators. This is where restaking enters the picture.

Solana users can now securely restake their assets (both native SOL and liquid tokens) with validators on the guest blockchain. These restaked assets secure the network and enable reliable operation in line with IBC’s requirements.

The reward? While staking generates yields for Solana users, this restaking opens a multiverse of earning potential.

Validators on the guest chain share a portion of the rewards they receive as compensation for their role in securing the guest blockchain. This means Solana users can potentially stack an additional layer of rewards above their existing yields.

Composable plan to use Pyth for Solana-based restaked assets.

Picasso, PICA Token, and a Multi-Chain Playground

Naturally, the PICA token stands as the backbone of the Picasso Network. PICA has been deployed across multiple ecosystems, from the Composable Cosmos Chain to a Kusama Parachain incarnation of Picasso.

Picasso is highly secure, efficient, and natively interoperable due to its use of a parachain.

As the IBC network’s fuel, PICA boasts extensive utility. In the current context, PICA is a key part of the restaking reward structure on the Solana guest blockchain and will facilitate cross-chain interactions.

Let’s explore specific use cases, particularly where PICA shines in unlocking Solana’s potential:

The Restaking Technology: In enabling IBC compatibility for Solana, PICA underpins the entire reward structure for validators securing the guest blockchain. Users restaking their Solana-based assets and selecting validators will interact directly with PICA-denominated rewards.
Bridging Transactions: True to its cross-chain purpose, PICA will play a key role in handling fee payments associated with transferring assets or using applications relying on Picasso’s cross-chain bridges.
Picasso Network Governance: Holders of PICA have a say in how Picasso and its connected infrastructure evolve. This could include setting future fee structures, deciding which new blockchains to prioritize, or how PICA reward emissions are shaped over time.
Ecosystem Growth: PICA is designed to incentivize development, with dedicated pools allocated for grants and funding teams creating solutions that further bolster the Picasso Network and its IBC connections. This can attract top developer talent.

Broader Utility Across Picasso’s Ecosystem:

It’s crucial to remember it’s not just about Solana:

Pablo DEX: Picasso’s native decentralized exchange leverages PICA’s liquidity, potentially creating trading pairs between PICA and assets from a multitude of IBC-connected chains.
Apollo Oracle: A permissionless and MEV-resistant oracle native to Picasso will rely on PICA-based staking to align incentives and power secure price feeds.
Beyond IBC: Projects choosing to deploy within Picasso’s ecosystem, even before direct IBC links are established, benefit from PICA as a shared network asset from day one.

As Picasso weaves IBC connections to an ever-greater array of blockchains, the intrinsic value of PICA stands to grow alongside it. PICA’s success is directly tied to increased activity across the bridges it underpins. Demand for secure cross-chain transactions, a wider variety of supported ecosystems, and greater governance participation by users creates a flywheel effect for PICA itself.

There will be 17,500,000 PICA allocated to Solana’s restaking vault participants. Once the Solana IBC connection launches, restaked assets will be allocated to validators and users begin accruing staking rewards in the form of transfer revenue.

So, what does this all mean for Solana users and builders?

The answer lies in the term “interoperability.” Imagine assets like SOL, bSOL (from SolBlaze), and staked ETH variations from chains like Ethereum all interacting with DeFi protocols in a connected environment. No more silos, no more giant walls. Here are a few thrilling possibilities:

Multi-chain DeFi Yields
NFT Collaboration
Developer Building Inter-operatable dApps

With this IBC breakthrough, Solana enthusiasts gain access to applications on-chain and their respective communities. Developers will be able to create any cross-chain use case imagined between Solana and the other IBC-enabled chains, such as Cosmos/the Interchain, Polkadot, Kusama, and Ethereum. As a result, other ecosystems can benefit from Solana’s speed, cost-effectiveness, huge liquidity, and community.

Some of the first assets enabled for restaking on the Solana guest blockchain will include SOL, Marinade’s mSOL, JitoSOL, and even Orca LP tokens. Users eager to seize this moment can participate in Picasso’s upcoming restake vaults to receive yield not just from their native Solana liquid staking positions but on this novel guest blockchain as well.

An Evolutionary Leap, Yet Only the Beginning

While the Solana IBC connection paints a bright future, Picasso’s ambitions far exceed a single connection. Their work has demonstrated that seemingly incompatible blockchains can be woven into the IBC tapestry using the Guest sub-layer blockchain.

In a similar vein to how Satoshi’s groundbreaking whitepaper served as the catalyst for a worldwide revolution, Picasso’s pioneering efforts in unlocking IBC for the Solana blockchain mark yet another pivotal milestone in our ongoing evolution of this transformative technology.

Get ready Solana community, the ride of decentralized innovation is about to get much smoother.

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