Efficient Cross-Chain Smart Contract Execution via State Channels

Public blockchains offer transparency and security guarantees, but suffer from limited throughput, high latency, and unpredictable transaction costs, making them unsuitable for the high-frequency data flows of the Internet of Things. In this work, we address these scalability challenges by introducing a hybrid architecture that leverages state channels to enable efficient cross-chain smart contract execution between a permissioned ledger, responsible for capturing pollutant measurements from IoT sensors, and a public blockchain, used for final settlement. Our approach enables the processing of sensor readings to be performed off-chain in a lightweight, low-cost environment, while preserving the integrity and non-repudiation guarantees of on-chain settlement through a state channel. We describe the protocol design in detail, and the use of our solution in a case study involving water quality sensors.