What Are Cross-Chain Bridges? 7 Best Examples

Cryptocurrency is a vast landscape where many different tokens, blockchains, and protocols form a complex digital network. However, this system is not nearly as cohesive as it initially appears. Transferring value and information between different blockchains is impossible natively, which is where a concept such as a cross-chain bridge comes into play.

Interoperability is one of the key steps toward broader adoption in the realm of decentralized finance. To achieve that, we need robust infrastructure that can bridge the gap created by different systems and programming languages. Ultimately, the goal is to utilize the strengths of every blockchain while overcoming its weaknesses through other systems.

In this article, we’ll explore how cross-chain bridges may reshape the cryptocurrency environment and create a close-knit digital world for developers, investors, and everyday users alike. Let’s dive in!

What Is a Cross-Chain Bridge?

A cross-chain bridge is a decentralized application (dApp) that enables the transfer of assets and information between different blockchains. This DeFi technology was designed to address the fundamental challenge in the crypto space: the need for interoperability between the networks.

Not long after Satoshi Nakamoto created Bitcoin, many other blockchains with native cryptocurrencies started appearing. However, different blockchains cannot communicate with each other. For instance, you can’t use BTC in its native form to pay for the fees on the Ethereum network.

Even if you had thousands of dollars worth of BTC, you wouldn’t be able to complete a single transaction on the Ethereum blockchain. That’s why there are tailor-made protocols that enable cross-messaging.

This interconnectivity is crucial in making a more efficient system, and it becomes more important as more layer-2 and layer-3 solutions are introduced. The goal is to allow participants to use cross-chain bridges to move coins, tokens, and other types of information freely without going through costly and time-consuming procedures.

Every new network is created to solve particular problems and facilitate certain activities. While that gives it an edge over other blockchains in some aspects, it makes it ineffective for other types of operations.

Cross-chain bridges can form a universal DeFi network where blockchains complement one another, and each brings unique strengths to the table.

How Do Cross-Chain Bridges Work?

Cross-chain bridges work by allowing information to be transferred from one blockchain to another. For this, they feature distinct programming and protocols, often leveraging the power of smart contracts to ensure security, transparency, and permissionlessness.

In general, there are three fundamental mechanisms that most cross-chain bridges utilize to function. These mechanisms are:

1. Locking, which refers to securely storing native assets in a vault secured by a smart contract or a trusted third party
2. Burning, which involves permanently removing a select number of crypto coins or tokens from circulation, usually by sending them to a one-way wallet with a burn address
3. Minting, which is the process of issuing new coins and tokens on a designated blockchain network

These processes are invaluable in cross-chain communication, as it’s impossible to transfer native coins or tokens from one blockchain to another. Instead, cross-chain bridges lock up or burn assets on one network beforeminting or unlocking them on another.

Sending crypto from the source blockchain to the destination blockchain is often referred to as “wrapping.” The value of tokens generated on a new network is pegged to the original asset, and they can, at any point, be transferred back. While on a destination blockchain, wrapped crypto can be used in the ecosystem just like any native coin or token.

Finally, the complexity of crypto bridging potentially introduced additional vectors of attack to an already intricate system. As a result, cross-chain bridges employ various defense mechanisms, like hashed timelock contracts (HTLC), multi-signature contracts, zero-knowledge proof protocols, and more.

Types of Cross-Chain Bridges

There are three main types of crypto cross-chain bridges based on the three key instruments they employ: locking, burning, and minting. These types are:

1. Lock and mint. This is the most common type of cross-chain bridge where users “transfer” assets to a destination blockchain by locking up their holdings on the native network. Locked-up tokens are governed by one smart contract, while another smart contract mints their wrapped versions. When a user wants to “return” their assets to the original network, they burn wrapped crypto and get native assets back.
2. Burn and mint. This method works similarly to the first one, except the original coins or tokens aren’t locked but burned. Burning permanently removes digital assets from circulation, which means there’s no need for a cross-chain bridge smart contract to keep them secured. Once the burning is completed and verified on the main blockchain, the same number of tokens is issued on the destination network. Burn and mint are often used on blockchains and don’t support asset locking.
3. Lock and unlock. Locking and unlocking assets is the simplest way to perform cross-chain transfers. This mechanism is often used for transactions between similar networks and blockchains that feature analogous programming and comparable levels of trust. Locked assets are kept in liquidity pools, which means there’s no burning or minting. This approach helps blockchains enhance each others’ liquidity and incentivizes revenue sharing.

In addition to these cross-chain bridge swaps, there are also programmable bridges that facilitate smart contract execution. Essentially, these mechanisms allow instructions from one blockchain to result in completion on another. Programmable bridges are invaluable in the creation of cross-chain platforms that allow staking, lending, yield farming, and more.

7 Best Cross-Chain Bridges

There are many cross-chain bridges with varied capabilities and use cases. The differences go from blockchain support to fees and dApp integration. That’s why we created a list of the best cross-chain bridges to help you find the one that suits your needs.

#1. Multichain Bridge

Multichain is a comprehensive cross-chain Web3 platform. Apart from token transfers between different networks, Multichain features a cross-chain messaging protocol called anyCall. It allows for the creation of powerful dApps that range from swaps and lending platforms to arbitrage bots, NFTs, and metaverse.

One of Multichain's key selling points is its non-custodial nature and reliance on smart contracts. The bridge also features a no-slippage feature, always performing 1:1 transactions with no hidden costs.

Fees on Multichain depend on the networks and assets involved in the transfer. In general, the platform takes a 0.01% fee, though there are minimum and maximum values that vary. Most transaction times are 10–30 minutes, but they can sometimes go up to 12 hours with substantial transactions.

#2. Synapse Bridge

Synapse Bridge supports more than 16 blockchains. This includes both EVM and non-EVM blockchains, as well as layer-1 and layer-2 networks, such as Ethereum, Arbitrum, Avalanche, Binance, Optimism, Polygon, Dogechain, Harmony, and others.

The platform features deep liquidity pools that allow for seamless swaps of native assets. In addition to an Optimistic security model that ensures cross-chain integrity, another one of Synapse’s key features is generalized communication. In essence, users can send any type of data across integrated chains, including snapshots and NFTs.

Ultimately, Synapse has more than $100 million in total value locked (TVL), over $43 billion in total bridge volume, and close to 10 million total transactions realized. That makes it one of the most widely used cross-chain bridges in DeFi.

#3. Portal Token Bridge

Portal Token Bridge allows for easy and streamlined transfer of crypto tokens and NFTs between different networks. Users can connect their wallets and transfer their assets in seconds with a user-friendly interface. Some of the networks that Portal Token Bridge supports include Algorand, Aptos, Arbitrum, Ethereum, Fantom, Oasis, Polygon, and others.

Another handy feature present on the token bridge page is the token or NFT origin verifier that allows holders to verify the source of their digital tokens based on the chain and address alone.

One of the platform’s latest additions is Wormholescan—a cross-chain block explorer. It features data on all cross-chain activity, maintaining transparency and helping keep users informed. Anyone can visit it to check the total number of transactions, total value locked, transaction volume, and various specific details on particular chain pairs.

#4. Across Bridge

Across is a layer-2 and rollups-focused bridge with more than $3.5 billion in total volume. That, coupled with more than 2 million processed transactions and the average fill time of one minute, make Across a go-to bridge for Ethereum-centric users.

This protocol uses an optimistic approach to designing security. A single honest participant is enough to prevent malicious actors, which makes the bridge one of the safest in DeFi. Across also offers ACX tokens as rewards to its users and has the Across DAO for governance, making it perfect for participants who want to join a community.

Rewards on Across come from staking tokens and contributing to pools. Crypto enthusiasts can submit their ETH, USDC, USDT, DAI, WBTC, and ACX to earn passive income while facilitating transactions and contributing to the bridge’s growth.

#5. Stargate Finance

Stargate Finance is a cross-chain bridge with a focus on DeFi composability. It allows users not just to transfer tokens between integrated networks but also to access additional dApps and features of decentralized finance.

The protocol utilizes locking and unlocking mechanisms to provide native coins and tokens to users who transfer crypto between blockchains. As a result, participants can submit their assets topools to earn stablecoins.

Moreover, they can stake the platform’s native STG to gain veSTG governance tokens. Finally, Stargate Finance offers farming features where liquidity providers can stake LP tokens in exchange for STG and participation in the community.

#6. Orbiter Finance

Orbiter Finance is a layer-2 bridge based on zero-knowledge (ZK) rollup technology. It’s designed to foster scalability through cross-chain interoperability. The goal is to have real-time coordination between the Ethereum mainnet and rollup transactions or layer-2 networks.

The platform integrates with numerous wallets, including MetaMask, Coinbase Wallet, BlockWallet, and BitgetWallet. Their L2 bridge allows the transfer of ETH and stablecoins USDC, USDT, and DAI between popular networks like Ethereum, Arbitrum, Polygon, and others.

#7. Hop Bridge

Hop is a trustless and scalable rollup-to-rollup bridge with nearly instant transaction times. The platform employs market makers (Bonders) to provide liquidity, allowing users to send and receive native tokens on integrated blockchains.

If demand shifts from one liquidity pool to another, the protocol uses automated market makers (AMMs) to adjust rewards, incentivizing users to restructure their assets and rebalance the pools.

Finally, Hop supports a modest number of networks, but it includes some of the biggest ones, like Ethereum, Polygon, Optimism, Arbitrum One, and Arbitrum Nova. It also connects with two wallets: WalletConnect and Coinbase Wallet.

4 Challenges of Cross-Chain Bridging

While cross-chain bridging offers a lot of utility to blockchains and assets, it’s not without compromise. Here are some of the key challenges associated with this method of transferring value and information:

1. Security vulnerabilities. Cross-chain bridges introduce additional attack vectors. Even if both source and destination blockchains have robust security measures, the bridge can be vulnerable, leaving connected networks susceptible to hacks and exploits. With centralized, trusted bridges, there are also concerns regarding governing authorities since they can be influenced or bribed.
2. Performance discrepancies. Different blockchains feature disparate characteristics, such as processing times, block sizes, computing power, etc. As a result, there’s no one-size-fits-all solution where a single blockchain can bridge to all the others. Instead, individual bridges need to be made to overcome specific shortcomings and enhance particular qualities, such as speed and decentralization.
3. Wrapped asset considerations. While wrapped assets are designed to mimic original cryptocurrencies in every aspect, they still aren't native coins or tokens. As a result, their holders agree to certain trade-offs regarding trust and security. DeFi platforms, dApps, and other users that interact with these assets do so under the assumption that they are like their native counterparts.
4. Finality concerns. Immutability is one of the key aspects of blockchain. Once a transaction has been verified, it is final and unchangeable. However, once you introduce cross-chain bridging into the equation, you get another step to account before finalization. A malicious attack or a smart contract mistake at this step could result in the minting or issuing of unbacked bridged tokens.

Key Takeaways

It’s clear that cross-chain bridges aren’t just technological mechanisms created to facilitate token transfers; they are complex instruments developed to unify the world of decentralized finance.

Moving crypto from one blockchain to another is just one step in a long process of linking unique networks. The end goal is to have an interconnected digital structure where every system plays to its strengths and complements others.

Going forward, we can expect these bridges to play a crucial role in the evolution of cryptocurrency. Since they encapsulate the core DeFi philosophy, it’s only natural that they end up being its most significant contributors!

Cross-Chain Bridge FAQ

• Are cross-chain bridges safe?

  While established cross-chain bridges are safe for transferring value between blockchains, hackers can target them. Cybercriminals often try to exploit vulnerabilities in DeFi platforms, including cross-chain bridges. When successful, they can steal assets and disrupt the operations of entire networks.

• What cryptocurrencies work with cross-chain bridges?

  Cross-chain bridges support cryptocurrencies that operate on blockchains they connect. These bridges connect multiple networks, such as Ethereum, BNB, Polygon, Solana, and more. Each of these blockchains supports hundreds of thousands of cryptocurrencies, all of which work with cross-chain bridges.

• What is the best cross-chain bridge?

  The best cross-chain bridge depends on the user’s individual needs. Many consider Across Protocol to be the best and most complete cross-chain bridge. However, crypto enthusiasts looking for an EVM alternative might look into Stargate Finance. Portal Bridge is suitable for non-EVM networks, and Hop Exchange offers layer-2 alternatives.