Bridges

Blockchains operate independently, meaning assets like ETH on Ethereum cannot be used directly on BNB Chain or Solana. Bridges solve this by enabling cross-chain communication, allowing users to transfer tokens or interact with decentralized applications (dApps) on multiple networks.

🔄 How Bridges Work

1. Lock & Mint Mechanism – A user deposits assets into a smart contract on the source chain. The bridge locks the tokens and mints wrapped tokens on the destination chain.
2. Burn & Release Mechanism – When users transfer assets back, the bridge burns the wrapped tokens on the destination chain and releases the original assets on the source chain.
3. Liquidity Pool Bridges – Some bridges don’t mint tokens but use liquidity pools on each chain to facilitate instant swaps.

⚙️ Key Benefits

✅ Interoperability – Enables cross-chain functionality and access to dApps across multiple blockchains.

✅ DeFi Expansion – Users can move assets to chains with lower fees or higher yields.

✅ Scalability Solutions – Bridges allow Ethereum users to interact with Layer 2 solutions (e.g., Arbitrum, Optimism) for cheaper transactions.

🏛 Example 1: Polygon Bridge

Users transfer ETH from Ethereum to Polygon using the Polygon PoS Bridge. The bridge locks ETH on Ethereum and mints wrapped ETH (wETH) on Polygon, allowing users to use it in Polygon DeFi apps.

🏛 Example 2: Wormhole Bridge (Ethereum ↔ Solana)

Wormhole enables cross-chain transfers between Ethereum and Solana. If a user wants to move USDC from Ethereum to Solana, the bridge locks USDC on Ethereum and issues wrapped USDC on Solana.

📚 References

1. Chainlink – What Is a Cross-Chain Bridge?

2. CoinGecko – Crypto Bridges: Enabling Blockchain Interoperability

⚠️ Controversies & Misconceptions

• “Bridges are always safe” – False. Bridges are common attack targets, with hacks causing billions in losses (e.g., Ronin Bridge hack - $600M stolen in 2022).
• “Bridged assets are the same as native tokens” – False. Wrapped tokens depend on the bridge’s security and may not always be backed 1:1 if exploited.

🚀 Conclusion

Bridges enable seamless cross-chain asset movement, improving interoperability and liquidity in DeFi. However, security risks, high fees, and centralization concerns require users to choose trusted, audited bridges for safe transfers.

Related Terms

• Liquidity Pool

  A liquidity pool is a smart contract that holds assets to facilitate decentralized trading.

• Layer 2

  Layer 2 refers to scaling solutions built atop Layer 1 blockchains to enhance transaction speed and reduce costs.

• Proof-of-Stake (PoS)

  A consensus mechanism in blockchain networks where validators are selected to propose and validate new blocks based on the amount of cryptocurrency they hold and are willing to "stake" as collateral.

• DApp (Decentralized Application)

  A decentralized application (DApp) is an application that runs on a blockchain or peer-to-peer network without a central authority. DApps leverage smart contracts to facilitate trustless operations and decentralized governance.