Cross-chain Bridges

What Are Cross-chain Bridges

A cross-chain bridge is a protocol that moves assets or data between different blockchains. It allows you to use ETH from Ethereum on Arbitrum or Solana.

Core problem:

• Blockchains are fundamentally isolated
• Ethereum doesn't know Solana, and Solana doesn't know Ethereum
• Bridges connect this gap

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Why Bridges Are Needed

Multi-chain Environment

Reality:

• DeFi is distributed across multiple chains
• Ethereum: High security, high gas fees
• Arbitrum/Optimism: Low gas fees
• Solana: Fast speed
• Each chain has unique apps and opportunities

Problem:

• What if you have ETH on Ethereum but want to use an Arbitrum dApp?
• What if you want to move Solana liquidity to Ethereum?

Role of Bridges

• Move assets from Chain A → Chain B
• Expand DeFi opportunities
• Integrate liquidity
• Improve user experience

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How Bridges Work

Basic Concept: Lock and Mint

The most common bridge mechanism.

Process:

1. Lock: Lock assets on the source chain
2. Verify: Bridge confirms the lock
3. Mint: Issue wrapped tokens on the destination chain
4. Use: Use the wrapped tokens

Example: ETH → Arbitrum

Ethereum           Bridge Contract        Arbitrum
    |                  |                  |
    |-- Send 1 ETH --> |                  |
    |                  |-- Confirm Lock ->|
    |                  |                  |-- Mint 1 WETH
    |                  |                  |

Reverse Direction: Burning

When returning from destination to source chain.

Process:

1. Burn: Burn wrapped tokens on the destination chain
2. Verify: Bridge confirms the burn
3. Unlock: Unlock original tokens on the source chain

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Types of Bridges

1. Lock and Mint Bridges

Operation:

• Lock original assets
• Issue wrapped tokens on destination

Examples:

• WBTC (Wrapped Bitcoin)
• Most cross-chain tokens

Characteristics:

• Original assets exist on the source chain
• Destination tokens are "IOUs" (claims)

2. Burn and Mint Bridges

Operation:

• Burn on one chain
• Issue on another chain

Examples:

• Some stablecoins (USDC CCTP)
• Native cross-chain tokens

Characteristics:

• Maintains total supply
• Requires issuer authority

3. Liquidity Pool Bridges

Operation:

• Liquidity pools on both chains
• Deposit on one side → Withdraw on the other

Examples:

• Stargate
• Synapse

Characteristics:

• Actual asset exchange
• Slippage possible
• No wrapping

4. Atomic Swaps

Operation:

• Hash Time Lock Contracts (HTLC)
• Both sides exchange simultaneously or cancel

Characteristics:

• No trust needed
• Slow speed
• Limited liquidity

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Bridge Verification Methods

1. External Validators

Method:

• Selected validator group confirms transactions
• Multisig or consensus mechanism

Examples:

• Multichain (formerly Anyswap)
• Wormhole

Advantages:

• Fast speed
• Supports various chains

Disadvantages:

• Requires trust in validators
• Hacks when validators compromised

2. Light Client

Method:

• Verify original chain block headers
• Direct verification on destination chain

Examples:

• Near Rainbow Bridge
• Cosmos IBC

Advantages:

• Higher security (inherits source chain security)
• Minimized trust

Disadvantages:

• Complex implementation
• Limited compatible chains

3. Optimistic Verification

Method:

• Assumes transactions are valid
• Challenges possible during challenge period

Examples:

• Some rollup bridges

Advantages:

• Efficient

Disadvantages:

• Delay time (challenge period)

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Major Bridges

Canonical Bridges

Official bridges operated by chain development teams.

Characteristics:

• Most secure (inherits chain security)
• Withdrawals take time (7 days for rollups)
• Minimal fees

Stargate

Characteristics:

• Based on LayerZero
• Liquidity pool method
• Native asset transfers without wrapping

Supported Chains:

• Ethereum, Arbitrum, Optimism
• Polygon, Avalanche, BNB Chain
• Many others

Advantages:

• Fast speed
• Native assets
• Unified liquidity

Wormhole

Characteristics:

• Guardian network (19 validators)
• Wide chain support
• $320M hack in 2022 (recovered)

Supported Chains:

• Ethereum, Solana, Terra
• Polygon, Avalanche, BNB Chain
• Many others

Across

Characteristics:

• Uses UMA's optimistic oracle
• Fast speed
• Competitive fees

Supported Chains:

• Ethereum, Arbitrum, Optimism
• Polygon, zkSync

Hop Protocol

Characteristics:

• Fast bridge between rollups
• Bonder system
• L2 specialized

Supported Chains:

• Ethereum, Arbitrum, Optimism
• Polygon, Gnosis

Comparison Table

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How to Use Bridges

General Process

1. Prepare Source Chain

   • Connect wallet
   • Have gas tokens

2. Choose Bridge

   • Check supported chains
   • Compare fees
   • Check speed

3. Execute Transaction

   • Enter amount
   • Verify destination address (usually the same)
   • Approve and send

4. Wait

   • Time varies by bridge
   • Track transaction

5. Confirm Destination

   • Verify asset arrival
   • Add token if needed (for wallet display)

Bridge Aggregators

Services that compare multiple bridges.

Examples:

• Li.Fi: Integrates multiple bridges + DEXs
• Socket: Bridge comparison
• Bungee: Route optimization

Advantages:

• Automatic optimal route finding
• Fee/speed comparison
• One-click bridging

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Wrapped Tokens

Concept

Wrapped tokens are tokens that represent assets from another chain.

Examples:

• WETH (Wrapped ETH on Ethereum) - ERC-20 version of ETH
• WBTC (Wrapped BTC) - Ethereum version of Bitcoin
• axlUSDC - USDC via Axelar bridge

Differences by Wrapping Method

The same USDC becomes different tokens depending on the bridge.

Caution:

• Different wrapped USDC may not be 1:1
• Liquidity/fees differ
• DeFi protocol support differs

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Bridge Selection Guide

Considerations

1. Security:

• Canonical bridges > Verified third-party > New bridges
• Check hacking history
• Audit status

2. Speed:

• Official rollup bridges: 7 days (withdrawals)
• Third-party: Minutes to hours

3. Fees:

• Bridge fees
• Gas (both chains)
• Slippage (liquidity pool method)

4. Liquidity:

• Slippage for large transfers
• Liquidity of wrapped tokens

Recommendations by Use Case

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Summary

Cross-chain bridges enable asset movement between different blockchains, with lock-and-mint being the most common method. Canonical bridges are the safest but slow, while third-party bridges (Stargate, Across, etc.) are faster but carry additional risks. Wrapped tokens differ by bridge, so caution is needed. Aggregators like Li.Fi can help find optimal routes. Bridges are essential DeFi infrastructure but are high-risk areas with many hacking cases, so they should be used carefully.

Next article: Bridge Risks - The Hotspot for Hacks