Because of the increase in the number of Layer 2’s and other cross-chain applications, there is a need for a system to move assets across chains. The answer to this need are bridges. Normally, blockchains are unable to communicate with other chains, being limited to only their own chain. These blockchains have their “own set of rules, governance mechanisms, native assets, and data that are incompatible with the other blockchains.” Bridges are able to establish connections between different chains where crypto, data, and smart contracts can be moved from one chain to another. Different blockchains vary in their “speed, throughput, costliness, etc,” but with Bridges, a developer can take advantage of different blockchains’ strengths.
Here are some advantages of Bridges for developers:
- Enables the transfer of “data, information, and assets across chains.”
- Use the strengths of different blockchains. Some chains have cheaper fees, so developers can bridge to this chain and take advantage of these lower fees
- Attract users from other blockchains to their applications
- Collaborate with developers on different blockchains
There are three main Bridge designs:
- Lock and Mint: Assets aren’t moved from the chains; rather, they are frozen onto one blockchain, and tokens of equal value are created on the other blockchain. When the user wants to redeem the assets, the tokens that were created on the other blockchain are burned and the assets are then available to be used
- Burn and Mint: Assets are burned on the current chain and minted on the other chain.
- Atomic Swaps: Assets are swapped for assets on the other chain with another party.
This was Part 1 of What Are Bridges? Part 2 is coming soon.
If you want to learn more, check out the links below:
What Are Blockchain Bridges, and Why are they Important for DeFi?
Thank You for Reading
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