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Paper presented at ICBC2019 International Conference on Blockchain
June 25 - June 30, 2019, San Diego, USA
https://doi.org/10.1007/978-3-030-23404-1_6
Blockchain Interoperable Digital Objects
Babu Pillai1, Kamanashis Biswas1, 2 and Vallipuram Muthukkumarasamy1
1Griffith University, Gold Coast, Australia. 2Australian Catholic University, Sydney, Australia.
babu.pillai@griffithuni.edu.au,kamanashis.biswas@acu.edu.au,
v.muthu@griffith.edu.au
Abstract. The future of distributed ledger technology such as blockchain is de-
pendent on its ability to interact and integrate with other systems. Therefore, in-
teroperability has become a fundamental issue that needs to be addressed. The
emerging category of crypto-assets are managed and understood using different
frameworks. There is, therefore, a need for a unified classification of crypto-as-
sets. This work aims to bring some clarity to and understanding on interoperable
crypto-assets and their characteristics. This paper categorizes digital crypto-as-
sets for the purpose of implementing interoperability. The categorization of
crypto-assets is based on their functionalities and their purpose. An interopera-
bility scenario has been given for the defined crypto-asset classes.
Keywords: Blockchain, Distributed Ledger Technology, Interoperability, Digi-
tal Assets, Crypto-assets, Crypto-coins, Crypto-tokens.
1 Introduction
The blockchain technology has emerged as a disruptive technology, that enable trust
among untrusted network nodes in the digital world. Blockchain the underlying tech-
nology behind bitcoin has enormous potential for enhancing the trustworthiness of data
in a distributed environment, [1] and is foreseen as a possible solution to a number of
challenging problems across many domains [2]. The technology adds trustable value to
digital entities in the Internet domain and makes it possible to transfer value, rather than
information over the network [3, 4]. These unique characteristics open a new form of
cryptographic assets, which have generated significant interest in another type of digital
assets. With the promise of trustability, transparency, and traceability of digital objects
registered in the system, the blockchain technology has attracted significant research
studies and industrial attention [5].
A diverse ecosystem of blockchain projects with different protocols and crypto-
graphic structures offering a variety of solutions has emerged to serve the needs of the
digital world. However, these blockchains remain isolated, operating in their own re-
spective silos, each one with its own ecosystem, consensus model, and network. Many
of these projects offer a solution to a specific problem [6] such as the decentralized
2
marketplace1, and open-bazaar2. Thus, it has become clear that there will exist many
more independent networks of blockchains designed for specific problems. The appli-
cations developed on these networks need to cross communicate with each other to
provide real services in a broad range of situations. This emerges as a new paradigm of
“establishing connections between isolated blockchain networks” creating the concept
of interoperability [4].
Interoperability is generally referred to as the ability of different systems to com-
municate with each other in a distributed environment to exchange or retrieve infor-
mation/data. The application that operates on each system must interpret the data and
understand the meaning of the exchanged information. In the case of blockchain based
system, the most significant obstacle to be overcome in the creation of this interoperable
network of blockchains would be the preservation of what makes each chain unique
when the value moves from one chain to the other. A recent study conducted by Hi-
leman and Rauchs [7] suggests that “Interoperability will be essential for the massive
adoption of blockchain and distributed ledgers.” Therefore, whether a public or private
type of blockchain, interoperability across blockchain systems will become a core re-
quirement [8].
The concept of interoperability among blockchain based systems is not fully under-
stood and it is vital for the future growth of the blockchain industry. It has been seen
that interoperability solutions are viewed from the perspective of a generalized infor-
mation system [9, 10]. However, this perspective of interoperability has been failed to
achieve true and adequate levels of interoperability for every situation. Hence, a con-
cept of a systematically categorized perspective is needed. Therefore, we need to look
at the design philosophy of this technology and categorize the type of digital crypto-
assets the system is holding that require interoperability. Thus, there is a clear require-
ment for a unified classification of interoperable asset classes. The purpose of this clas-
sification is to provide an independent type of crypto-assets in order to guide the design
and implementation of interoperability. In this paper, we propose a classification of
crypto-assets, based on the purpose and the type of value the asset carries, which helps
to understand the crypto-asset landscape.
The rest of the paper is structured as follows. Section 2 introduces interoperability,
its challenges, goals, approaches and mechanisms. Section 3 discusses blockchain and
digital objects classifications. Section 4 describes a crypto-asset classification for
blockchain based systems. In Section 5, we formalize the classification and map the
crypto-asset class with an interoperability scenario, and finally, Section 6 concludes the
paper.
2 Interoperability
Interoperability refers to the ability of two or more systems to provide service or
accept service from the other system and to utilize the service of a common exchange
effectively together [11]. The linkage should allow these connected systems to ex-
change data accurately, effectively, and consistently [12]. That means the application
1 https://coincentral.com/decentralized-marketplace-blockchain/
2 https://openbazaar.org/
3
that operates on each system must understand the functionality, which is available for
the other system. Software level interoperability is essential since it allows information
to be shared without an intermediary. Furthermore, a common standard will enhance
the possibility of in-built interoperability [4, 13].
For a blockchain technology-based system, interoperability refers to cross-commu-
nication between different blockchains that enables to exchange or retrieve information
or values. This deals with information obtained from another system and makes a
change to the state of that system based on the received information. However, inher-
ently the blockchain is an ‘append only’ model, and the state can only be appended
through transactions, by nodes within its own network using their consensus mecha-
nism [1, 13-16]. Therefore, here the underlying assumption is that “cross-communica-
tion is not intended to make direct state changes to another blockchain system. Instead,
a cross-communication should trigger some set of functionalities on the other system
that expected to perform an operation within its own network”, as an example, verifying
the authenticity of information requested within its own network. However, for the pro-
cess of interoperability cross-communication remains a challenge - because interoper-
ability requires the integration of different interlinked information sources [17].
2.1 Challenges
Considering the Internet or intranet as an overall network and blockchain as plat-
forms with sub-networks within it holds a variety of digital assets. The current state-of-
the-art blockchain technology is architectured in such a way that it operates as a
standalone system. It is designed so that a network of node participants, who are the
stakeholders, decide on the current state of the system based on an agreed protocol [15].
This protocol dictates the value and the consensus model. Most importantly the value
has been created by and exists only within the system and its nodes [13]. This means,
enabling interoperability is a way to exchange value from one blockchain system to
another system. However, validating data from another system is challenging because
each systems' value is unique and no cross-chain standard classifying crypto-assets'
value exists. Therefore, each blockchain system has its own idiosyncratic interopera-
bility issues that cannot be addressed using a general information systems perspective.
This is the main challenge we address so that data and digital assets can be exchanged
between sub-networks.
2.2 Goals of Interoperability
Generally, interoperability is developed through functional design principles and
standards thus it forms a base for different applications to communicate and helps to
automate the process. Many approaches have been proposed to achieve interoperability
such as: Integrated approach – where a commonly agreed format of data structure ex-
ists; the Unified approach – where a common format with semantic understanding ex-
ists; and the Federated approach – where connections established accordingly [18]. A
common goal of the interoperability approach is to enable cross-communication using
different types of technologies.
4
Interoperability seems to be a strategical concept, where different systems cross-
communicate to achieve a common goal. Here the desired goal is to connect separate
networks of ledger systems and facilitate cross-chain communication in order to inter-
act and transfer data. To understand the interoperability goal, it is first necessary to
identify the scenarios for interoperability: an active mode – where systems must be able
to engage in the interaction to send and receive data; and a passive mode where systems
able to receive data [4]. Therefore, the desired interoperability generally falls into two
categories, identified as:
Cross-chain ‘transfer \ exchange’ - a cross-chain transfer process aims to transfer
various types of assets or value from one blockchain system to another. That means
the systems must be in active mode and have a common understanding of the se-
mantics so that the transfer occurs meaningfully.
Cross-chain ‘validation \ verification’ – a cross-communication process aims to pro-
vide the ability to verify assets, value or information between the blockchain sys-
tems.
In order to facilitate cross-communication, many techniques such as sidechain, relay,
notary schemes and hash-locking are under development [19]. A variety of approaches
have been proposed to achieve interoperability [4, 8], but nearly all of them lead to the
violation of the principles of decentralization. The core benefit of a blockchain technol-
ogy-based system is to overcome the risk of centralization.
2.3 Approaches for Interoperability
Interoperability approaches aim to address interoperability barriers however, we
must consider how these barriers are removed [18] because some approaches may lead
the system to change its security model. Considering the decentralized nature of the
architecture, where multiple nodes participate in the process to reach finality, nodes
must retain the same result. For that, nodes must have or be given the information in
order to process the transaction. If the nodes are set to fetch data from other blockchain
systems, the dynamic nature of values would interfere with the consensus. Therefore,
the exchange process must be carefully designed in accordance with the system goal.
This leads to the interoperability focuses on two types of approaches: centralized and
decentralized.
In a centralized approach, the cross-communication operation is triggered by a single
entity and operates directly between the sender and the receiver blockchain. This
results in the cross-communication process in a closed environment. The inner com-
munication is facilitated through some trusted/ credible nodes acting as notaries to
verify whether a specific event has happened on one chain and taken agreed action
on another chain [4, 19-21].
A decentralized approach assumes that the cross-communication occurs automati-
cally at a protocol level through smart contracts in a distributed environment. For
example, when Bob invokes a transfer transaction on his chain, it will automatically
be credited in Alice’s chain.
5
Current research is experimenting several mechanisms with the aim of achieving
interoperability among networks of blockchains.
2.4 Interoperability Mechanisms
Many research groups and industries are actively investigating multiple blockchain ar-
chitectures and protocols that allow blockchains to cross-communicate between differ-
ent networks and thus facilitate the exchange of transactions. Many FinTech start-up
companies are also working on various blockchain architectures and protocols to ad-
dress interoperability.
Pegged side-chain is an addition to the bitcoin protocol and enables assets to be
transferred back and forth between multiple blockchains [22]. Generally, this can be
implemented in any blockchain system that holds an asset, token or cryptocurrency.
The ‘parent’ chain, known as the main blockchain is connected by a new blockchain
called a side-chain. There is little interaction between the two. The side-chain as the
custodian of assets from the parent chain, and this same asset is locked in the main
chain to prevent double spending. However, the advantage of this side-chain is that it
can perform instant transactions at a higher speed and volume. Micropayments are the
most common use case for side-chains. In this system, it is not necessary to record every
transaction between two parties on the main blockchain. If only a handful of parties are
concerned about a recurring transaction, it is not necessary for all the other nodes to be
aware of those transactions. Instead, a direct connection should be created between the
two pairs which perform transactions on a recurring basis for a certain period of time
and only the final balance is recorded on the blockchain [23].
Relay is a mechanism where a ‘Chain A’ actively listens to and keeps a record of
part of the information such as block header from another ‘Chain B’. This will be useful
for a light client to verify block headers belonging to ‘Chain B’ by using a standard
verification process [19].
Hash-locking is another technique for the exchange of digital assets without a trusted
third party. The mechanism utilizes a hash time [24] locked system which puts a time
lock on the transaction so that both the obligations are fully met, otherwise the transac-
tion cannot occur – atomic transaction [19].
Bridges or gateways are the intermediate mechanism aim to provide interoperability
between systems. The objective here is to bridge the differences between various data
standards, and middleware. To perform a conversion between the protocol of the send-
ing system and the protocol of the receiving system, the gateway can be expanded with
the use of plug-ins.
3 Blockchain and Digital Objects
At their core, blockchains are decentralized databases maintained by a network of
computers. Blockchain technology enables the digital representation of assets and their
secure transfer of value [25]. By design, the security of the value transfer is guaranteed
by the interaction protocol itself and obviates the need for trusted transaction interme-
diaries [13]. Bitcoin has emerged as the first blockchain application of a decentralized
6
crypto-currency system [25]. Even though Bitcoin blockchain was implemented as a
decentralized currency system, the application is, in fact, a software system that exe-
cutes a scripting language in a distributed environment. To think beyond the payment
system required new developments in the technology itself which lead to the develop-
ment of the Ethereum project [26]. Ethereum was developed as a platform that could
run programmed applications on blockchain through smart contracts [27]. Thus, it cre-
ated a wide variety of decentralized applications which opened the technology to the
possibility of digital assets and tokens [28-30]. With the ability to tokenize and decen-
tralize not only cryptocurrency but also other scarce assets the blockchain technology
significantly expanded its disruptive potential [29].
Blockchain technology offers a verifiable way to track digital transactions. This
makes this technology useful for digital asset management systems. Such functionality
offers the storage and transacting of crypto-assets [25]. This is a use case where a sys-
tem holds a crypto-asset and the user will be able to transfer the asset between systems.
Blockchain also allows crypto-assets to be distributed while protecting them from being
copied. Thus, the technology is useful to track assets as they move through the systems
in a distributed environment [31]. The advantage of a low transaction fee and not having
to rely on a single entity are the main benefits of this technology [13].
3.1 Digital Object Classification
Digital objects [32] are an essential part of a modern information system that strives
towards technology-independent and future-proof automated operations between soft-
ware and computer systems. Digital objects exist solely in the digital space and carry a
state of information [32]. Further, they can be classified into different digital asset clas-
ses to fully bridge the gap between physical and digital mixed world.
Primarily, there are two ways of representing digital objects, tangible and intangible
objects. Tangible items are classified as objects with physical existence, such as car,
house, and they are unique. In the context of the blockchain, a tangible object represents
an asset which has a physical existence as well represented in a digital form. The clas-
sification of asset objects is based on the tangibility of the assets. Intangible items are
those items that do not have a physical nature such as service and are represented as
abstract objects within the system. Further, as referred in Table 1, within the type of the
tangible and intangible objects, there are ‘fungible’ and ‘non-fungible’ objects [33].
Fungible objects belong to a digital object class which are exchangeable and are built
using a common standard, value and characteristics, such as currency and ERC3-204
tokens. Cryptocurrencies are perfect examples of fungible tokens, in fact, fungibility is
the essential feature of any currency. However, if we take the fungibility out of it, then
it becomes a non-fungible token, which is a unique, non-interchangeable special type
of objects, such as a birth certificate, passport and ERC-215 tokens.
3 Ethereum Request for Comments
4 https://theethereum.wiki/w/index.php/ERC20_Token_Standard
5 https://medium.com/crypto-currently/the-anatomy-of-erc721-e9db77abfc24
7
Table 1. Characteristics of assets
C
haracteristics
D
efinition
Examples
Tangible Has a physical existence. Land, Property.
Intangible Items are concepts that represent
things.
Services, ID.
Fungible Built using a common standard. ERC-20 tokens,
Currency.
Non-fungible Type of objects that are unique. Birth certificate,
Passport.
4 Crypto-assets
The generic definition of an asset is a resource which an individual or organization
owns or controls and which is expected to produce future economic value. Assets used
to be classified as tangible objects, such as buildings, and intangible objects such as
intellectual property [34]. The proliferation of digital technology has created a new
class of assets known as Data Assets or Digital Assets which exist in binary format,
examples of which are digital pictures and Facebook accounts. In the context of this
paper, we refer asset as a digital representation of an item that is being created and
exists in a blockchain.
Blockchain technology and its services have given birth to a new cryptographic form
of assets termed as crypto-assets [29, 35]. Crypto-assets are a type of digital assets,
recorded on a blockchain ledger, which utilize techniques such as cryptography, dis-
tributed consensus, peer-to-peer network, and smart contract [36] in order to create,
transact and verify in a decentralized manner [30, 37], such as BTC and ETH [17]. They
derive their names from the cryptographic security mechanisms used within the distrib-
uted systems.
The concept of crypto-asset [14] in blockchain systems is essentially a technology
that produces virtual tokens that represent value in a closed network. The primary weak-
ness of such crypto-asset token-based systems is its inability to operate outside of its
network. Currently, it is being facilitated through third-party intermediaries. Crypto-
assets are also referred to as crypto-tokens or crypto-coins, which are primarily based
on the asset’s functionality. In the context of this paper, ‘coin’ refers to a cryptographic
asset used as a medium of value exchange, whereas the term ‘token’ refers to an abstract
category of digital assets, that acquires specific features depending on the context.
The primary purpose of these crypto-assets is to be used as a medium of exchange
independent of any central bank, and with a specific value [37, 38], such as currency, a
place holder for digital representation of objects and services. There are different clas-
sifications of these assets based on their functionalities and purposes [30, 39]. There
are frequent discussions on whether the crypto-assets can be classified as money or
assets [37, 40]. However, this paper does not cover the legal or accounting sides of
crypto-assets.
8
Crypto-assets and their taxonomy are arguably the most important component for
enabling interoperability in the blockchain space. Many forms of crypto-assets exist
however when you separate them based on the type and functionality most crypto- as-
sets fall into one of the following categories as shown in Table 2.
Table 2. Classification of crypto-assets
Asset Class
Definition
Crypto-coin
Representation of digital objects that express the purpose of
acting as a medium of exchange or unit of account and imple-
mented at a protocol level, for
example
, BTC, ETH.
Asset-token Representation of an object that has some characteristics, for
example
,
a
car, property
.
Utility-token
Representation of digital objects that provide the right to ac-
cess or utilize the value derived from it, for example, a ser-
vice or subscription
.
The Fig. 1 represents the relationship between the existing category of assets and the
classification of blockchain crypto-assets. For example, an asset-token can represent a
tangible or intangible item, however, a crypto-coin represents an intangible object. Each
of these crypto-assets can be considered ‘digital objects’ with their own individual
properties.
Fig. 1. Blockchain crypto-asset classes
In the blockchain space, crypto-asset is a new concept. To the best of our knowledge,
there is no generally accepted standard for asset classification in the crypto space.
Therefore, apart from these three basic categories shown in Table 2, there is much po-
tential for the creation of new asset classes because crypto-assets are digital
9
representation of objects. These objects achieve shape and inherit characteristics when
they are mapped to an appropriate digital object. A brief description of the given asset
class and their properties are described in the following subsection.
4.1 Crypto-coins
Crypto-coins are also referred as crypto-currencies, a new form of money, implemented
on the blockchain for the purpose of a medium of exchange independent of any central
control such as a bank. Crypto-currencies such as BTC or ETH are called native cur-
rencies. Because they are developed for and exist within the system and are used to pay
for the computational service offered by the system. These are also used as payment-
currency where payments can be made for goods or services [41]. Crypto-coins such as
BTC and ETH are built into the system as part of the protocol. Therefore, they are not
directly exchangeable between other systems, instead they can only be traded.
4.2 Asset-tokens
Unlike crypto-coin, asset-tokens are not native to a blockchain they are created on
top of a blockchain and can be used to represent a wide range of assets beyond curren-
cies. Asset tokens are commonly implemented in the smart contracts that may have
physical existence such as car, property or may be without a physical existence such as
company shares. The domain of digital technology including supply chain is increas-
ingly dependent on the effective management of digital assets which have been man-
aged by central entities [42]. However, these entities have used proprietary techniques
which are usually slow, costly, insecure and vulnerable to abuse. Blockchain would be
an effective solution to manage digital assets more effectively. CryptoKitties6 are a
classical example of non-fungible tokens that are digital collectables and unique to each
other. Some other use cases are Know Your Customer ID7 for digital academic certifi-
cates and copyright [43], supply chain tracking, software licenses, and more.
4.3 Utility-tokens
Utility tokens are a type of system or network, distinct digital token that represents a
unit of product or service. They are also presented as tokens that enable future access
to a product or service [44]. Utility tokens are not designed for investment [45]; rather
they are designed to be used as a service which can be purchased. In the blockchain
space, ERC20 compatible tokens on the Ethereum platform are considered utility to-
kens. Other utility-tokens such as TRC10 and TRC208 also exist.
6 https://www.cryptokitties.co/
7 https://home.kpmg/ie/en/home/insights/2018/02/blockchain-kyc-utility-fs.html
8 https://tron.network/
10
5 Mapping of Crypto-Assets
Irrelevant of varies category of assets, digital objects are represented in the same form.
However, when we map with a particular type of asset class (crypto-coin, asset-token
or utility-token), the digital object gets its form and inherits the characteristics of the
assets. Therefore, it is essential to determine and understand the appropriate asset class
to represent objects in an interoperable environment. Based on the characteristics (tan-
gible, intangible, fungible and non-fungible) and classification (crypto-coin, asset-to-
ken and utility-token) of crypto-assets, we propose a crypto-asset classification frame-
work as shown in Fig. 2.
Fig. 2. Crypto-asset characteristics framework
5.1 Scenario: Crypto-coin
Generally, crypto-coins are divisible and intangible in nature, unless they have been
assigned to different purposes or combinations for a specific purpose. Crypto-coins are
formed and exist in a ledger of a distributed system in the form of transaction. Each
distributed system runs its own independent ledger and has coin native to it. Therefore,
validating one coin from another system is challenging. Currently third-party ex-
changes facilitating the exchange who has access/share on both the network and act as
a liquidity provider facilitating the swapping [40]. There two types of exchanges exist:
centralized and decentralized. A centralized exchange dependent on a third-party or
intermediary to hold the coin and process the exchange. They offer to swap of a variety
11
of crypto-coins mainly through exchange them against fiat currency. Therefore, the
centralized exchange is often expensive, inefficient and vulnerable to attack whereas
decentralized exchanges do not rely on a third-party service to facilitate the swap. In-
stead, it occurs directly between users (peer-to-peer) through an automated process.
Such a system can be established through a decentralized network using multi-signa-
ture, hatch-lock and other solutions. A mapping of crypto-coin with the interoperability
approach of centralized and decentralized scenario has been given in Table 3.
Table 3. Crypto-coin interoperability scenario
Crypto-coins Centralized approach Decentralized ap-
proach
Proposed direction
Cross-chain
transfer of
crypto-coins
Through centralized
exchanges.
Through decen-
tralized exchanges
using a mecha-
nism such as
multi-signature
and hash-lock.
If two systems
operate on one
crypto-currency,
then it is a matter
of transferring
from one system
to another in an
agreed way using
g
ateways.
Validation/ veri-
fiability
Through centralized
services such as a no-
tary.
Yes, a relay sys-
tem can be imple-
mented to verify
the block.
Web3 and API ac-
cess to verifica-
tion.
5.2 Scenario: Asset-token
Asset-tokens are a digital representation of tangible items in the form of fungible or
non-fungible tokens. Each unit of the asset must uniquely identify and hold character-
istics based on its asset class, such as, for a car, registration number, model, year of
manufacture; and for a property, its ID, land area, land location. Additionally, if the
assets are of fungible nature, each unit of the asset must uniquely identify and hold the
same characteristics within both systems. An example such as Colored Coin [46] de-
scribes a class of methods for representing and managing real-world assets on top of
the Bitcoin network. A mapping of Asset-token with the interoperability approach of
centralized and decentralized scenario has been given in Table 4.
12
Table 4. Asset-token interoperability scenario
Asset-token Centralized approach Decentralized ap-
proach
Proposed direction
Cross-chain
transfer
Yes, but centralized,
using an intermediary
to process the trans-
fer.
Yes, but the token
that representing
the asset must
have the same se-
mantics.
Common data
standard and
protocol such as
ERC 20 and ERC
21 toke
n
s
.
Validation/ veri-
fiability
Centralized valida-
tion through notary.
Yes, a relay sys-
tem to verify the
block data.
Web3 and API
access to
verification
.
5.3 Scenario: Utility-token
Utility-tokens are not generally made for exchange purposes; however, there might
be a use case where the same product or service may have to exchange information with
each other. There is more chance that the exchange may happen between users within
the network. Because the token holds the service value, but the network is the one that
provides the service. The tokens are designed for spending within a specific blockchain
ecosystem. A mapping of Utility-token with the interoperability approach of centralized
and decentralized scenario has been given in Table 5.
Table 5. Utility-token interoperability scenario
Utility-token Centralized ap-
proach
Decentralized ap-
proach
Proposed direction
Cross-chain trans-
fer
The value has to be
recreated in the
other system.
Not directly trans-
ferable, it has to
be recreated in the
other system.
Cross-chain
bridge or gate-
ways for burning
the value in one
chain and recreate
the value in an-
other chain.
Validation/ verifi-
ability
Centralized valida-
tion through notary.
Can use Cross-
chain bridge and
relay.
Web3 and API
access to
verification
.
Moving forward, it will be vital to distinguish between different cryptographic digi-
tal objects that function as crypto-coins, asset-tokens or utility-tokens. A digital crypto-
asset can fall into three or more of these categories based on its actual characteristics–
and additional categories may not have been invented yet. Therefore, it is difficult to
create a lasting category of crypto-assets. However, we assume our classification of
crypto-assets will serve as a base for ongoing discussion of current and emerging digital
crypto-asset classes.
13
6 Conclusion
In this paper, we identified the basic category of interoperable crypto-asset classes
for blockchain based systems. Further, we provided some clarity on their characteristics
and analyzed the current state of interoperability and its proposed directions. Crypto-
graphic assets management is a promising use case for blockchain technology. Adding
the concept of interoperability through cross-chain communication enables the transfer
of digital assets from one blockchain to another. Assets may be of tangible or intangible
in nature, may be implemented at protocol-level or in a smart contract, may be in the
form of fungible or non-fungible tokens. Irrespective of the various categories or types,
digital objects are represented in the same form as series of binary 1s and 0s. However,
when we map with a particular type of asset class, the digital object gets its shape and
inherit the characteristics and attributes of the assets. Therefore, it is important to de-
termine and understand the appropriate digital asset class to represent objects. With a
clear view of different types of crypto-assets and underlying values, an appropriate in-
teroperability approach can be determined for an expected outcome.
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