Blockchain bridges: Guide to cross-chain data sharing LogRocket Blog
Sidechain bridges connect the parent blockchain to its child sidechain, enabling interoperability between the two. They are needed because the parent and sidechain may have different consensus mechanisms. One example is xDai Bridge, which connects the Ethereum mainnet to Gnosis Chain (formerly xDai blockchain), an Ethereum-based stable payment sidechain. XDai is secured by a set of validators different from those who maintain the Ethereum network. The Avalanche Bridge is a bi-directional cross-chain bridge between the Avalanche and Ethereum networks, facilitating the seamless transfer of tokens between the two networks. It uses ChainSafe’s ChainBridge and facilitates two-way transfers of both crypto tokens and NFTs.
Blockchain bridges help to minimize traffic on congested blockchains, such as the Ethereum ecosystem, and distribute it over other, less crowded blockchains, enhancing the Ethereum network’s scalability. Let’s take a closer look at specific benefits offered by blockchain bridges. However, all blockchains develop in isolated environments and have different rules and consensus mechanisms. This means they cannot natively communicate, and tokens cannot move freely between blockchains.
Across Protocol
But, what do you do if you want to make a similar exchange to use a different blockchain? Let’s say you want to exchange ETH on Ethereum Mainnet for ETH on Arbitrum(opens in a new tab). Like the currency exchange we made for EUR, we need a mechanism to move our ETH from Ethereum to Arbitrum. In this case, Arbitrum has a native bridge(opens in a new tab) that can transfer ETH from Mainnet onto Arbitrum. It can also help in converting the tokens back into Ethereum-compatible formats. The Binance Bridge offers support for converting ERC-20 tokens as well as a few other coins on different networks.
The bridge supports blockchains that you might not be able to find on many other multi-chain bridges, including Sui, Sei, Near and Aptos. Of course, the Portal Token Bridge also supports more common networks such as Ethereum, BNB Chain, Solana and Polygon. The distinguishing features of Orbiter Finance include its safety, as it has less risk than other cross-L1 bridges, relying on the safety rollup technique.
Market Overview
Only when you wish to withdraw to an external wallet would the transaction be made on the Ethereum or Bitcoin blockchains. Navigating the dynamic landscape of blockchain technology, one often encounters the need for efficient asset transfers. This is where the concept of bridging comes into play, acting as a vital conduit between different blockchains.
- Bitcoin, Ethereum, and BNB Smart Chain are some of the major blockchain ecosystems, all relying on different consensus protocols, programming languages, and system rules.
- Trust-based bridges can be a quick and cost-effective choice when transferring a large quantity of cryptocurrency.
- So, when you’re bridging tokens between blockchains, we recommend you exercise some caution and never bridge more than you can afford to lose.
- The team behind a crosschain messaging protocol will often select its operators from trusted companies and blockchain infrastructure providers to limit the number of nodes and, therefore, inefficiencies.
- With fiat currency there are many established ways for individuals and businesses to exchange money, creating a globally available and interoperable system of financial payments.
- According to the documentation, an Avalanche transaction on AB will take a few seconds, while an Ethereum transaction may take up to 15 minutes.
The outline of the most popular cross-chain bridges is an essential requirement for crypto and web3 users right now. Cross-chain bridges could guarantee significant benefits such as better user experiences and more opportunities for achieving asset productivity. In addition, cross-chain bridges could also ensure that developers could leverage the liquidity accessible on different platforms, thereby improving liquidity for concerned dApps.
Stargate Bridge
Similarly, you cannot send SOL, Solana’s native asset, to an Ethereum address. Aside from enabling cross-chain transfers, blockchain bridges provide other benefits. They allow users to access new protocols on other chains and enable developers from different blockchain communities to collaborate.
A Crypto Bridge, or blockchain bridge, is a connection that allows the transfer of tokens and/or arbitrary data between two different blockchain ecosystems. These ecosystems can be two entirely separate blockchains, such as Ethereum and Binance Smart Chain, or two different layers of the same blockchain, like Ethereum and its Layer 2 solutions. There are several approaches to enabling transfers with a cross-chain bridge. One common approach is using a wrapped token issued by the cross-chain bridge provider platform. With a wrapped token, the value of one token from a specific blockchain network can be encapsulated inside another token.
What Is a Blockchain Bridge?
The Metamask wallet is configured to the SmartBCH network and users can simply use their wrapped BCH for a myriad of different DeFi applications. Stateless simplified payment verifications (SPVs) are less expensive to run compared to relays, and smart contracts can validate a portion of the proof-of-work genesis history. Merged consensus approaches are robust and provide two-way interoperability between chains through the relay chain. Merged consensus is fairly powerful, but it is usually necessary to build it into a chain from the start.
Ronin, Axie Infinity’s blockchain, allows users to lock their ETH and USDC to buy NFTs used in the game. However, attackers managed to steal over 117,000 ETH and 25,500,000 USDC on March 23rd, which at that time was worth well over $625 million. An example of an atomic swap is where a token on the first blockchain is relocated so that it is unavailable, and another token is produced on the second blockchain. In this example, the token on the second blockchain must be established only if the token on the first blockchain is confirmed to be unavailable. Cross-chain development continues to grow in complexity, due in part to the growing number of blockchains and the differences between the chains.
What are the best blockchain bridges?
The protocol consists of two core components i.e. the Synapse Bridge and the Synapse AMM. The Synapse Bridge can facilitate the seamless transfer of crypto tokens and assets among multiple blockchain networks. Some of the popular blockchains supported by the Synapse Bridge include Avalanche, Polygon, Arbitrum, Binance Smart Chain, Harmony, Fantom, and Boba.