xData and xAssets
High on the wishlist of blockchain features is the ability to detach tokens from their native chains. It is a tremendous limitation that ETH only exists on Ethereum, MATIC only exists on Polygon and SOL only exists on Solana. It would be far more useful if those assets were able to move freely, independent of their native blockchains.
That thought underpins the idea of an xAsset, which could be considered a next-generation wrapped token. In a sense, xAssets exist on a layer outside of the blockchain ecosystem, and so are able to transact on a variety of blockchains. An xAsset is chain- and path- agnostic, so it retains fungibility regardless of where it travels. xAssets can also move fluidly around the blockchain ecosystem without ever becoming double-wrapped.
Now that we've established the idea of an xAsset, you might think they're an excellent atomic unit for solving interoperability challenges. However, xAssets are just one step short of the real solution. Let's take a step back: blockchains now process arbitrary data, and some of that data just happens to represent assets. The full solution then, is to create xData.
xData is akin to an xAsset in that it exists in its own layer independent of any blockchain, which makes xData accessible by all blockchains. The difference is that xData represents arbitrary data rather the token information represented by an xAsset.
Cross-chain interoperability then becomes a matter of creating, consuming and managing xData. Once blockchains have the ability to read and write data into a shared, global reservior, application design can take on innovative new dimensions.
Later in this document, we'll delve deeper into how Wormhole implements this xData layer (also referred to as the 'Core' layer of Wormhole), but for now let's talk about how xData can be used to create xDapps.