Interoperability between different siled blockchains has been a major challenge in the cryptocurrency space. However, cross-chain crypto bridges are emerging as a powerful solution that allows users to seamlessly transfer digital assets and information from one blockchain to another. In this guide, we’ll look at what a crypto bridge is, how it works, the different types of crypto bridges, and the risks associated with them.
What is a cross-chain crypto bridge?
A cross-chain crypto bridge, also known as a blockchain bridge, is a protocol that connects two or more blockchains, allowing assets and data to be transferred between them. Think of a crypto bridge as an intermediary that facilitates the transfer of tokens between two different, previously isolated blockchain ecosystems. This was previously impossible for the average user.
Another example of this is the use of SOL tokens on the BNB chain. The crypto bridge allows the native SOL token of the Solana blockchain to be connected to the BNB chain. Another popular application is moving BTC from the Bitcoin blockchain to the Ethereum blockchain. Here you can use it in the form of Wrapped BTC (wBTC) or Wrapped BTC (cbBTC) for various DeFi applications and earn additional profits.
At CoinSutra, we’ve been discussing the concept of a cross-chain crypto bridge for several years, but only recently has it been ready for mass adoption. The emergence of popular blockchains such as Solana, Arbitrum, and Avalanche, which have captured significant market share, has increased the demand for applications that enable cross-chain bridging.
How does a cross-chain bridge work?
Cross-chain crypto bridges typically work by locking a native token on a blockchain in a smart contract and then creating that wrapped token on the target blockchain. For example, if you want to move BTC from the Bitcoin blockchain to the Ethereum blockchain, the original BTC is locked in a smart contract on the Bitcoin network. The cross-chain bridge application then mints the same amount of Wrapped BTC (wBTC) on the Ethereum blockchain. These wBTC can then be freely used within the Ethereum ecosystem. Whenever a user holding wBTC wants to convert it back to BTC, they can do so using a cryptocurrency bridge.
Note: If you use a trusted crypto bridge and issue tokens on another blockchain, it is important to ensure that those tokens are widely accepted. Be especially careful with major cryptocurrencies such as Bitcoin, Ethereum, etc.
If you’ve been in the cryptocurrency industry for a while, you may have used a centralized exchange like Binance, Bybit, or Kraken to freely move your USDT between different blockchains. This exchange allows you to deposit or withdraw USDT on multiple blockchains. However, as DeFi becomes more user-friendly, many users prefer not to interact with centralized exchanges for blockchain connectivity.
Thanks to technological advancements, there are now many high-quality, near-instantaneous cross-chain crypto bridges that can bridge tokens from one blockchain to another with lower fees than centralized exchanges. Fees are much lower than using a centralized exchange.
Types of Cryptographic Bridges
There are three basic types of cryptographic bridges:
- Lock and Mint: In this model, a smart contract locks a native token on the source blockchain and that wrapped token is created on the target blockchain. If you want to reverse the process, burn the wrapped token on the target chain to free the original token on the source chain.
- Bun and Mint: With this type of bridge, users burn tokens on the source chain and the bridge mints new tokens on the destination chain. This is often used when a protocol decides to migrate tokens to a new blockchain, which allows users to burn their existing tokens and create new tokens on the new chain.
- Lock and unlock: In this model, tokens are neither burned nor minted. Instead, tokens are locked on the source chain and then unlock the same underlying token on the target chain. This method is generally used to increase capital efficiency and attract new liquidity.
Crypto Bridge Hacking: Key Challenges
It is important to be aware of the risks while using any technology in the blockchain space. The biggest risk for decentralized applications is the hacking of smart contracts. Decentralized crypto bridges are not immune to this either, and there have been numerous notable hacks in the past. These hacks had a huge impact on the cryptocurrency industry, especially when the technology was in its infancy and protocols did not have sufficient funding for security audits.
Chainalysis reported that by 2022, approximately $2 billion worth of cryptocurrency had been stolen through 13 cross-chain bridge hacks. The situation did not improve much after that. According to the 2024 Chainalysis report, a whopping $2.2 billion was stolen in cryptocurrency-related hacks in 2024 alone, a significant portion of which occurred through bridge exploits.
Here are some of the most important crypto bridge hacks.
- Ron’s Network: $625 million hack (March 2022)
- worm-hole: $326 million hack (February 2022)
- nomad: $190 Million Misappropriation (August 2022)
- Binance Bridge: $100 million hack (October 2022)
- harmony: $100 million hack (June 2022)
Bridges and Cross-Chain Swaps: What’s the Difference?
It is important to understand the difference between cross-chain bridges and cross-chain swaps. The bridge is simply same They can be exchanged from one blockchain to another (e.g. ETH on Ethereum to WETH on Polygon) through cross-chain swaps. different You can transfer assets across two blockchains in a single transaction (e.g. ETH on Ethereum to SOL on Solana).
Cross-chain swaps are generally faster, more convenient, and more cost-effective than using a bridge and then performing the swap using a decentralized exchange (DEX).
EVM and non-EVM bridges
Crypto bridges can also be classified into Ethereum Virtual Machine (EVM) and non-EVM depending on the type of blockchain they connect to.
- EVM compatible chain Includes Ethereum, BNB Chain, Polygon, Avalanche, and Arbitrum. Bridges connecting these chains are typically easier to build due to shared technology standards.
- Non-EVM chain These include Bitcoin, Solana, Cosmos, Polkadot, etc. Bridges connecting EVM chains and non-EVM chains are more complex to develop because they require different technical architectures to be coordinated.
The rise of bridge aggregators
As crypto bridges proliferate, new types of services emerge. bridge aggregator. Similar to how a DEX aggregator finds the best price for a token swap, a bridge aggregator searches multiple bridges to find the most efficient and cost-effective path for cross-chain transfers. This saves you the time and effort of manually comparing different bridges and their fees.
Best Crypto Bridge
We will learn more about the main bridges in cryptocurrency in the next article.
As of now, here is a quick list of reliable cryptocurrency bridges with high trading volume.
- Portal Bridge (formerly Wormhole)
- Dbridge Finance
- stargate
- across
- exchange ranking
conclusion – Cross-chain encryption bridge for beginners
Cross-chain crypto bridges are an essential component of the evolving multi-chain environment, enabling greater interoperability and liquidity across the crypto ecosystem. The technology faces serious security challenges, but ongoing improvements and the emergence of bridge aggregators are making cross-chain transfers more secure and user-friendly. As the cryptocurrency space continues to expand, bridges will play an increasingly important role in connecting different blockchains and opening up new possibilities in decentralized finance.
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