Definition ∞ A Federated Protocol is a communication standard or system where multiple independent entities collaboratively maintain a network or service. Unlike a fully decentralized system, participants in a federated protocol often operate with some degree of coordination or shared governance. This arrangement permits distributed operation while retaining certain levels of control or oversight. It offers a balance between centralization and full decentralization.
Context ∞ In the context of digital assets, federated protocols are utilized in certain blockchain interoperability solutions or consortium blockchains. These protocols allow different networks to exchange data or assets under a mutually agreed-upon set of rules. News concerning federated protocols highlights efforts to achieve cross-chain communication and resource sharing, which is vital for building a more connected and efficient digital asset ecosystem.
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