Bridging in Blockchain
A post on Bridging in blockchain and why it’s a key area we should understand although it’ll fade in the background.
I’ll break it up in the following sections and in future posts will dive into the areas!
0. Role of a Bridge
1. Types of Bridges
2. What happens when you bridge
3. Bridging and Interoperability
4. Challenges
5. Exploits
Role of a Bridge
I’m assuming you have a primer and background on what blockchain networks are here. If you’re new to bridging it’s exactly what it sounds like. It’s a main way to get between different networks. Without them you’re stuck on the island.
When you move assets from an exchange to a hardware wallet, or software if you must, you may be using a bridge.
One day in the future projects like Across, BungeeExchange, Connext.Network UA, lifiprotocol, Nomad, Stargate, Symbiosis Finance, Orbiter_Finance, and others will make bridges a back of the house thing. Similar to the poor sap that takes out the garbage in the restaurant, no one will see or care for the bridge till it stops working. We won’t see the bridge because we’ll just say I want to swap asset a for b without caring about what network it’s on. And if you do, then you’ll specify the destination and the dApp will figure out where to find the source asset.
Types of bridges:
1: Asset/Token (Similar to those above)
2: NFT, these can get hairy so follow XP.NETWORK and Scotty Beam for more depth!
3: Centralized vs Decentralized
So what actually happens when you bridge an asset let’s say from Avalanche to Fantom Foundation or ethereum to MetisDAO, and we’ll use a non-swap bridge like Synapse Protocol or Multichain (Previously Anyswap):
1: Atomic Swaps are key. Binance Academy and Others have good depth. TLDR; both sides of the contract have to be considered final or the tx fails. Dig into Hashed Time Locks Contracts
2: Wrapping. Think of wrapping like a vault. On one side you deposit the asset into the vault, and on the other side it’s released from another vault. The vaults communicate and agree on the transaction.
3: Burning/Minting. Asset is destroyed on one side and minted, created, on the other network.
4: NFT Replicants: You lock up the NFT in a contract on Chain A and a replica of that NFT’s metadata is minted on the destination chain. Remember, the arts not on chain generally.
Interoperability
Why is this important? Because of Interoperability;
The future is a multichain world and bridges will be a back of house thing. But they’ll be crucial for connecting the inevitable infinite amount of chains that will exist. For now one thing that’s key to understand is the terminology and what you’re talking about.
If you’re talking about a dApp like 1inch Network or DODO, those apps are multi-chain, because they support different networks. When you use a newer technology stack like Nomad and LayerZero Labs Stargate then that’s more of cross-chain. Because you’re sending a message across multiple chains. Cross-chain can also be using one of the above mentioned bridges to send a token across chains/networks.
Challenges Bridges and their users face:
1. Understanding Native vs Wrapped Tokens
2. Varying token standards and inconsistencies in implementations across chains
3. Liquidity on both sides of the bridge
4. Time to finality
5. User Experience
Exploits:
Wormhole Bridge — ~$320M — https://www.coindesk.com/tech/2022/02/02/blockchain-bridge-wormhole-suffers-possible-exploit-worth-over-250m/
Ronin Bridge — ~$600M — https://www.coindesk.com/tech/2022/03/29/axie-infinitys-ronin-network-suffers-625m-exploit/
That’s it for now on Bridging. Let me know if I missed something or you want a deeper dive.
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