In 2009, there was only one cryptocurrency, Bitcoin. There was no need to transfer data between different chains at that time. The loneliness of the first blockchain was temporary and short-lived, even given the youth of the cryptocurrency market.
To date, there are already 115 first-level blockchains operating in the virtual space. Operations like ETH to SOL exchange have become commonplace and the problem of fragmentation of the blockchain space has risen to its full height.
The Prototype of Bridges – Multichains
Multi-chain networks are originally designed to ensure the interaction of independent chains. Among the most famous multi-chain projects are Polkadot, Cosmos, Kusama. The architecture of multichains is designed in such a way that the connected blockchains are already fully compatible. However, they may have significant differences in management models, conditions of use, etc.
At the same time, built-in compatibility does not mean that you can simply transfer the token between parachains. Usually even in these cases there are technical limitations. When it comes to connecting to external networks, additional structures are still needed.
Why Cross-chain Bridges Are Needed
Network bridges perform several important functions.
- Bridges eliminate the problem of interaction between blockchains. Network interoperability enables the exchange of data and assets, and enables the creation of powerful new products and services.
- This feature allows DeFi users to transfer assets or data from the blockchain with few or no dApps to another more trusted ecosystem.
- High scalability is one of the key conditions for the correct operation of a dApp. Blockchain bridges are built with these requirements in mind, making it easier for developers and a better system for users.
Each platform has its own strengths: better security, lower gas fees, faster transaction completion times, and more. An interconnection bridge makes it possible to combine the complementary characteristics of platforms and use their capabilities simultaneously without overpaying for services.
At the same time, it is worth considering that internetwork bridges, just like real ones, are ideal targets for attacks.
Popular Cross-chain Bridges
Let’s take a look at a few cross-chain bridges that are in demand in today’s blockchain industry. In fact, there are many more, and new ones appear regularly as the decentralized finance sector grows.
Tezos Wrap Protocol
Tezos Wrap Protocol only supports Ethereum and Tezos. The protocol is designed for decentralized transfer of ERC-20 and ERC-721 tokens from the Ethereum blockchain to Tezos. For use on the Tezos network, users issue wTokens (wrapped tokens). Their rate is pegged to the underlying asset. The commission is dynamic, and in some cases it can be negative.
Huobi Wallet Bridge
The bridge is built into the mobile crypto wallet is equipped with a built-in bridge supporting Ethereum, Polygon, Binance Smart Chain, Avalanche, OKExChain, Huobi ECO Chain, Fantom for asset exchange. The wallet also offers a full range of other features, including connection to decentralized applications.
Fully decentralized cross-chain exchange protocol based on Fusion DCRM technology. It is equipped with an automated pricing and liquidity system, supports more than 35 blockchains. There is no commission as such, a gas fee is charged. The project also supports a decentralized exchange. So far, only the beta version of Anyswap is available, and the developers warn that you can use it entirely at your own peril and risk.
Solana’s Wormhole supports 8 blockchains: Ethereum, Solana, Avalanche, Binance Smart Chain, Fantom, Terra, Polygon, Oasis. It is a communication mechanism between the leading decentralized finance networks, with the ability to transfer not only ordinary fungible tokens, but also NFTs.
Avalanche Bridge serves as a link between Ethereum and Avalanche. At the same time, if you exchange assets for more than $75 at the rate, you can count on an airdrop in the amount of 0.1 AVAX per wallet. The exchange takes about 10 minutes on the Ethereum side and 5-10 seconds on the Avalanche side. There is no commission, except for the gas fee.