What are crypto bridges?
Crypto bridge is a technology that enables the transfer of cryptocurrencies and tokens between different blockchain networks. For example, a crypto bridge can allow bitcoin to be sent from Bitcoin to the Ethereum network, or Solana tokens to be exchanged for Cardano tokens . Bridges are important for the interoperability and scalability of the crypto ecosystem, because they enable the exchange of value and data between different platforms, and in this way the growth and progress of one network will be linked to the growth of other networks, so the entire crypto ecosystem will progress more easily. These crypto bridges can be centralized or decentralized, depending on who manages them and how transparency of transactions is ensured, and we will see later that this item is very important for the security of the bridges.
Source: cointelegraph
How does crypto bridge work?
Crypto bridge works by enabling communication and data transfer between different blockchain networks that would not otherwise be compatible. Bridge uses special smart contracts that lock the original tokens on one network and issue equivalent tokens on another network. These equivalent tokens can be freely used on the target network, and when they want to return to the original network, they are burned and the original tokens are unlocked. A crypto bridge also uses special nodes that verify the validity and security of transactions on both networks, and some of the most famous crypto bridges and their roles are as follows:
1. Synapse Protocol – a comprehensive token bridging solution that supports multiple EVM (Ethereum Virtual Machine – networks compatible with Ethereum) and non-EVM networks, such as Ethereum , Binance Smart Chain , Polygon, Solana, Avalanche and Phantom
2. Arbitrum Bridge – specialized bridge for transferring tokens between Ethereum and Arbitrum – layer 2 solution for scaling Ethereum
3. Celer cBridge – Celer Network’s token bridging solution that supports multiple EVM networks, such as Ethereum, Polygon, xDai, Fantom and Arbitrum.
4. Stargate – a token bridge that supports a diverse range of platforms, such as Ethereum, Binance Smart Chain, Polygon, Avalanche, Fantom, Heco, etc.
Source: cointelegraph
Are crypto bridges safe?
Bridges are a frequent target of hackers trying to steal or manipulate locked or swapped tokens. Only in 2021. In 2018, multiple crypto bridges were hacked, resulting in a loss of approximately $1.5 billion. Even the founder of Ethereum himself, Vitalik Buterin, warned about the security problems of crypto bridges, claiming that connecting different networks is not nearly as secure as using a single network. Buterin also said that crypto bridges are not a long-term solution, and that a more secure alternative will have to be found, but that they are currently necessary for the functioning of the cryptocurrency ecosystem. We can conclude that these bridges are useful, but also dangerous tools, which require attention and caution on the part of the user, and trust in the service provider of bridging your funds.
Centralized crypto bridges are those that have one or more centralized entities that control and monitor the operation of the bridge. These entities can be companies, organizations, foundations or individuals, and the advantages of centralized crypto bridges are the speed, simplicity and low cost of transactions, because high fees for confirming transactions on the blockchain do not have to be paid. However, centralized bridges also have some disadvantages, namely a lack of security, transparency and trust, because central entities must be trusted not to manipulate, hack or steal locked or replaced tokens. Also, centralized crypto bridges are subject to regulatory pressures and censorship, as they must comply with the laws and regulations of the countries in which they operate. On the other hand, centralized crypto bridges are those that do not have central entities that control and monitor the operation of the bridge. Instead, they rely on a distributed network of nodes and smart contracts that verify and validate transactions on both networks. The advantages of these decentralized crypto bridges are high security, transparency and trust, because no one has to be trusted, but only mathematical algorithms and cryptography that guarantee the correctness and immutability of transactions. Also, decentralized crypto bridges are resistant to regulatory pressures and censorship, because they do not have to comply with the laws and regulations of the countries in which they operate. But we still have some disadvantages of decentralized crypto bridges, namely the speed, complexity and high cost of transactions, because high fees must be paid to confirm transactions on the blockchain, and there is still the possibility of hacking if there are holes in the smart contract code itself that can use.
Source: cointelegraph
Conclusion
In this blog, we have presented some of the best crypto bridges on the market that allow the transfer of tokens between different blockchain platforms. When choosing a bridge, it is important to ensure compatibility with the target blockchain, as well as assess the risk of possible hacks. We have also highlighted some of the main features and benefits of the most popular bridges. We hope this blog has helped you better understand crypto bridges and how to use them for your DeFi needs. If you want to learn more about decentralized finance or have any questions, you can always contact us on our social networks ( Twitter , Instagram ).
