What are Blockchain Bridges?

A cross-chain bridge is a tool that allows you to transfer assets from one blockchain to another , solving one of the main problems of blockchains: lack of interoperability.

Because blockchain assets are often incompatible, bridges create synthetic derivatives that represent assets from another blockchain.

If you use a bridge to send a Solana token to an Ethereum wallet , the wallet will receive a token that the bridge has "wrapped" or converted to a token based on the target blockchain. In this case, the Ethereum wallet will receive a "bridged" version of Solana - the universal token standard for fungible tokens on the Ethereum blockchain - that has been converted to an ERC-20 token.

How does the Blockchain Bridges Work?

Token transfers are the most common use case for cross-chain bridges. For example, let's say you want to transfer Bitcoin (BTC) to the Ethereum network. One option is to sell your BTC and then buy Ethereum (ETH) . However, this results in transaction fees and exposes you to price volatility.

You can also achieve this without selling your cryptocurrency by using a cross-chain bridge. When you bridge 1 BTC to an Ethereum wallet, the cross-chain bridge contract locks your BTC and generates an equal amount of Wrapped BTC (WBTC) , an ERC20 token compatible with the Ethereum network. The amount of BTC you want to port is locked in a smart contract and an equivalent token is issued or minted on the target blockchain network. A "wrapper" token is a cryptocurrency that has been tokenized. It is tied to the value of the asset it represents and can usually be redeemed at any time.

Is Blockchain Bridges Safe?

Both trusted and trustless methods may have fundamental or technical flaws. More specifically, there is a fundamental flaw in the centralized aspect of trusted bridges, while trustless bridges are vulnerable to software and underlying code vulnerabilities. In short, if a smart contract is flawed, malicious parties will almost certainly try to exploit it.

Unfortunately, there is no perfect solution to the industry's woes. Both trusted and trustless platforms have design flaws that compromise the security of cross-chain bridges in different ways.

While not foolproof, performing an extremely thorough source code audit before deploying a bridge to the blockchain can be a valuable first step in addressing the security concerns of a blockchain bridge. This has to be a thorough check to remove any flaws, as a hacker can gain access with just one errant line of code.

Why do We Need Blockchain Bridges?

One of the limitations is that different blockchains cannot collaborate. Each blockchain operates under its own set of rules, tokens, protocols and smart contracts. All blockchains emerge in isolated environments with unique rules and consensus mechanisms. This means that they cannot communicate locally and the tokens cannot move freely between blockchains. Cross-chain bridges help break down these silos and connect siloed crypto ecosystems. Tokens and data can be easily exchanged between blockchains through an interconnected network.

In addition to supporting cross-chain transfers, cross-chain bridges provide additional benefits. They enable users to access new protocols on other chains, while also allowing developers from different blockchain communities to collaborate. In other words, cross-chain bridges are an important part of the interoperable future of the blockchain industry.