Omnichain Infrastructure and Interoperability Protocols: Capital Allocation for Next-Gen Blockchain Scalability and Cross-Chain Liquidity

The blockchain ecosystem is undergoing a transformative shift as omnichain infrastructure and interoperability protocols emerge as critical enablers of scalability and liquidity. With the market size for blockchain interoperability projected to grow from USD 332.8 million in 2025 to USD 1,832.3 million by 2035-a compound annual growth rate (CAGR) of 18.6%-investors are increasingly scrutinizing capital allocation strategies to capitalize on this expansion according to market research. This analysis explores the drivers of growth, leading projects, and sector-specific dynamics shaping the investment landscape.

Market Dynamics and Growth Projections

The blockchain interoperability market is being propelled by the urgent need to address liquidity fragmentation and enable seamless cross-chain transactions. Cross-chain bridging, which facilitates asset and data transfers between disparate networks, dominates the market with a 41.2% share in 2025. This segment is critical for decentralized finance (DeFi) and decentralized applications (dApps), which together account for over 70% of the market's value proposition.

Projections vary across analysts, but the consensus is clear: the market is poised for explosive growth. While one report forecasts a CAGR of 18.6% through 2035, another estimates a CAGR of 28.3% through 2034, projecting the market to reach USD 7.9 billion. A third source even suggests a CAGR of 47.8%, with the market potentially hitting USD 18.6 billion by 2034. These divergent figures reflect the nascent yet rapidly maturing nature of the sector, driven by institutional adoption and technological innovation.

Leading Projects and Market Share

LayerZero and Axelar have emerged as dominant players in the interoperability space. LayerZero processes over $5 billion monthly in cross-chain messages across 130+ networks, with a reported 80% market share in the interoperability sector. Its infrastructure underpins a significant portion of the $1.3 trillion in annual cross-chain transfers recorded in early 2025. Axelar, meanwhile, has seen cross-chain activity surge by 536% year-over-year, processing over $10 billion in value transfers by mid-2025.

Other key players include Chainlink, which provides decentralized oracle infrastructure for secure cross-chain data exchange, and Ava Labs (Avalanche), which emphasizes high-performance smart contracts. Enterprise-focused solutions like IBM Blockchain are also gaining traction in supply chain and financial services.

Capital Allocation Strategies

Capital is flowing heavily into DeFi and cross-chain protocols, driven by demand for seamless transactions and liquidity sharing. The BFSI (Banking, Financial Services, and Insurance) sector is a standout growth driver, expected to register the fastest CAGR of 26.58% during the forecast period. This is fueled by cross-chain frameworks that enhance settlement efficiency and reduce transaction costs-a critical advantage for institutions navigating regulatory and operational complexities.

Geographically, North America remains a key hub due to its robust funding ecosystem and early adoption of blockchain technologies. However, the Asia-Pacific region is emerging as a growth engine, supported by government initiatives in countries like China and India. By 2035, the market is expected to be evenly split between North America and Asia-Pacific, reflecting a global shift toward decentralized infrastructure.

Risks and Considerations

While the growth trajectory is compelling, investors must remain cautious. Security vulnerabilities in cross-chain bridges-such as the $1.2 billion in losses from hacks in 2023-highlight the risks of liquidity fragmentation. Additionally, regulatory uncertainty in key markets could slow adoption. Projects with strong governance models, audited smart contracts, and partnerships with traditional institutions are better positioned to mitigate these risks.

Conclusion

The omnichain infrastructure and interoperability market represents a high-conviction opportunity for investors seeking exposure to next-gen blockchain scalability and liquidity. With cross-chain bridging dominating the value chain and BFSI adoption accelerating, capital allocation should prioritize projects with proven scalability, enterprise partnerships, and robust security frameworks. As the market matures, early movers like LayerZero and Axelar are likely to consolidate their dominance, while emerging players in Asia-Pacific and North America could redefine the competitive landscape.