What is a cross-chain bridge?

Cross-chain bridges allow for the transfer of cryptocurrencies, smart contract instructions, and data between blockchains. Although two blockchains may have different protocols, rules, and governance models, cross-chain bridges can securely connect them together through interoperability.

Users can use cross-chain bridges to:

• Trade digital assets quickly and easily.

• Take advantage of low operational difficulty.

• Take advantage of lower transfer fees on non-scalable blockchains.

Here is an example of how the bridge can be used to transfer cross-chain assets: When a user wants to convert an ERC20 A token on Ethereum to a BEP20 A token on the BSC chain through AnySwap, the ERC20 A will be locked on the source chain and the bridge will be notified to generate a BEP20 A on the BSC chain, which will then be transferred to the user.

Problems Solved by Cross-Chain Bridges

Cross-chain bridges promote cross-chain growth by providing multi-asset interoperability and greater security. Cross-chain bridges also solve the following problems:

• Reduce gas fees and speed up transactions.

• User assets can interact freely, providing a good user experience.

• The productivity and utility of existing crypto assets have increased.

• Better security and privacy.

Cross-chain bridges are applicable in the following cases:

• Token swaps between Ethereum and Layer 2 networks, interoperable assets between chains, faster and easier deposits and withdrawals to reduce operational complexity.

• Investors can use cross-chain bridges to speed up when investing in new chains, but they must first check their complete mechanisms and security.

• On decentralized exchanges, arbitrage trading is carried out through Optimism, Arbitrum, Polygon, etc.

Introduction to different cross-chain bridges:

Multichain

Multichain is the ultimate router for web3. It is a system designed to allow arbitrary cross-chain transfers. On July 20, 2020, Multichain (formerly Anyswap) was created to meet the communication needs between different blockchains.

Multichain's technology enables almost all blockchains to communicate with each other. For Ethereum chains (such as Binance Smart Chain), Layer 2 chains (such as Polygon), Bitcoin chains (such as Litecoin), parachain networks (such as Moonbeam in the PolkaDot system) or COSMOS chains (such as Terra). All of them have been merged or are being integrated. Multichain is often used as an interoperable layer because it supports all ECDSA and EdDSA crypto chains. Multichain currently supports 33 different blockchains.

Multichain is the leader in cross-chain bridges, with a rapidly expanding family of chains (currently 33), daily transaction volume exceeding $100 million, total value locked exceeding $5 billion, and thousands of daily users proving its popularity, security, and rich user experience.

Synapse

Synapse is a cross-chain layer protocol that enables frictionless blockchain interoperability. Synapse powers fundamental blockchain activities such as asset transfers, exchanges, and general messaging through cross-chain capabilities. It does this by providing decentralized, permissionless transactions between any L1, sidechain, or L2 ecosystem. Synapse supports EVM ecosystem blockchains.

Hop Protocol

Hop is a protocol for quickly transferring tokens between Rollups and their shared Layer 1 networks. Transferring assets between Rollups and Layer 1 networks is slow and expensive, and the Hop protocol allows assets to be transferred directly from one Rollup to the next, saving money.

Wormhole

Wormhole is a messaging mechanism that connects Ethereum, Solana, Terra, Binance Smart Chain, Polygon, Avalanche, and Oasis to many. Wormhole works by scanning a set of chains for messages sent by smart contracts running on those chains. It then directs the messages to the target chain, facilitating cross-chain message transfers.

Currently, two functions are implemented on top of the general messaging protocol:

• Token bridges allow users to seamlessly transfer wrapped assets between supported chains.

• ERC721 and SPL NFTs can be moved between Ethereum, Binance Smart Chain, Polygon, Avalanche, Oasis, and Solana using this NFT bridge.

RenVM

RenVM is a decentralized virtual machine protocol that does not require permissions.

A secure virtual computer network that enables cross-chain financing, transactions, mortgages, etc. for decentralized applications.

RenVM is one of the few scalable interoperability options. RenVM is a network that allows developers to add cross-chain capabilities to their DeFi applications. RenVM supports Bitcoin, Bitcoin Cash, Ethereum, and Zcash.

Summarize

Thousands of users use cross-chain bridges every day. Currently, there are many bridges in the ecosystem that support transfers between various blockchains. These bridges need to improve their security because a major vulnerability in the bridge could lead to billions of dollars in tokens being stolen.

Everyone in the Web3 world believes that there will not be a single blockchain that can handle everything, so we will have a multi-chain world. In this multi-chain world, cross-chain bridges will play an important role. In the next few years, we will see billions of dollars in daily transaction volume on these bridges.