Table of Contents
- What Are Cross-Chain Bridges?
- How Do Cross-Chain Bridges Work?
- Types of Cross-Chain Bridges
- Benefits of Cross-Chain Bridging
- Risks Associated With Cross-Chain Bridges
- Best Practices for Secure Transfers
- The Role of Cross-Chain Bridges in a Multi-Chain Future
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Today, Blockchain technology can support almost every innovative use case, existing and yet to come, on the internet. However, there’s one thing blockchains aren’t natively capable of — the ability to communicate and share assets with their peers.
That’s where cross-chain bridges help.
Cross-chain bridges are the ships connecting two islands (or blockchains) that would be incapable of sharing resources, communicating messages, and transferring value to and from each other if not for the bridges.
Crypto bridges are necessary pieces of infrastructure in the multi-chain world today. Tens of billions in bridged volume, assets, and applications have moved across chains. No wonder interoperability is one of the hottest narratives in 2025.
This article delves deeper into what a crypto bridge is and what makes cross-chain bridges a necessity in the decentralised world. We will discuss the benefits and risks of utilising bridges for transferring crypto assets across different chains.
What Are Cross-Chain Bridges?
A cross-chain bridge is a decentralised protocol that connects two blockchains and facilitates the transfer of assets from one blockchain to another.
Plasma and Wanchain from Ethereum were the first to experiment with asset movement across chains. Hop Protocol, Rhino, Axelar, Connext, Synapse, Wormhole, Polygon Pos Bridge, cBridge, and Binance Bridge are among the popular crypto bridges used by crypto users today.
Blockchain bridges facilitate cross-chain interoperability between distinct blockchain networks within a multi-chain Web3 ecosystem. These bridges enable various blockchains to coexist and thrive collectively as a unified decentralised finance (DeFi) economy, rather than operating as isolated, cluster-like ghettos.
They enable blockchain communication and cross-chain transactions to connect distinct blockchain economies. They also help improve token utility through multi-chain compatibility.
For instance, if a Solana user wants to transact on Ethereum, they don’t need to sell off their SOL tokens and purchase ETH. Instead, they can use a token bridge to convert their SOL into wrapped tokens, which are versions of the original token on the destination chain, and enjoy Ethereum's utilities.
The Need for Interoperability in Blockchain
In 2009, Bitcoin emerged as a solution to the centralised, overly compromised, and biased financial and banking structures, giving control back to users.
After Bitcoin, Ethereum, Solana, Cardano, and thousands of other blockchains found their niche in a unique use case, employed different security and trust systems, and developed an ecosystem comprising various DeFi protocols and users.
Today, the blockchain ecosystem consists not only of layer-1 blockchains with thriving ecosystems but also layer-2 solutions and layer-3 chains, each with its own technical stack and security provisions. Then there are Appchains, or application-specific blockchains, which are highly customised and unique, and need cross-chain bridges even more to bring users, share value, and discover new or better use cases.
Layer-1s vs Layer-2s key Differences on NFT.EU
For a freely liquid, decentralised world, there is a need for linkages between blockchains that serve as channels for the transfer of assets and arbitrary data between blockchains. Blockchain bridges enable cross-chain interoperability, making networks compatible with each other and facilitating the transfer of assets.
How Do Cross-Chain Bridges Work?
Blockchains operate like silos with fragmented liquidity. Since each blockchain has a different programming language, consensus mechanism, currency, and blockchain governance, it cannot understand what happens on other blockchains. Blockchains also have utility tokens that are native to their chain only. These tokens aren’t compatible with other blockchains.
Cross-chain bridges serve logistics requirements across blockchain networks. Bridges usually lock or burn tokens on the source chain, i.e., the chain where the token originated or is the native token of that chain, using a smart contract.
Using another smart contract on the destination chain, i.e., the chain where the token has to be transferred, the blockchain bridge unlocks or mints tokens representing the burned or locked tokens.
Blockchain bridges utilise a cross-chain messaging protocol to transfer tokens between different chains.
Suppose you want to use your SOL on Avalanche. SOL is the native token of the Solana blockchain, and AVAX is native to Avalanche. Both Avalanche and Solana have different consensus mechanisms, governance rules, protocols, and communities.
A cross-chain bridge would burn or lock your SOL on Solana and mint or unlock its wrapped version on Avalanche, allowing it to be used across DeFi protocols on Avalanche.
Cross-chain bridges can also be used to support multi-chain applications, such as cross-chain decentralised exchanges (DEXs) and cross-chain money markets.
Types of Cross-Chain Bridges
Cross-chain bridging happens using three kinds of mechanisms:
Lock-and-Mint Mechanism
Under the Lock-and-Mint mechanism, assets are locked in a smart contract on the source chain, and equivalent tokens are minted on the destination chain as wrapped versions of those tokens. When the user wants to move their assets back to the original chain, the wrapped tokens on the destination chain are burned, and the locked tokens on the source chain are unlocked and transferred to the user's wallet.
Bridges that use the Lock-and-Mint mechanism to transfer tokens across chains include Avalanche Bridge, Wrapped Bitcoin (WBTC), wMonero, and Polygon PoS Bridge.
Burn-and-Mint Mechanism
Under this cross-chain bridging mechanism, tokens are burned on the source chain and newly minted on the destination chain.
Hop and Across are two interoperability solutions that utilise the Burn-and-Mint mechanism for transferring digital assets across chains.
Lock-and-Unlock Mechanism
This bridging mechanism involves locking tokens on the source chain and unlocking equivalent tokens on the destination chain using a liquidity pool. The unlocked tokens are wrapped versions of the original token.
For instance, if an ETH user wants to stake their ETH on a chain like Polygon, they initiate a transaction that locks their ETH in a liquidity pool via an Ethereum smart contract. Simultaneously, a liquidity pool on Polygon unlocks an equivalent amount of wrapped ETH to be used on any of Polygon’s decentralised applications (dApps).
Benefits of Cross-Chain Bridging
There are numerous advantages of cross-chain bridges in the blockchain ecosystem.
Interoperability
Blockchains are limited in terms of their computing power, storage capacity, and scalability, as they must be decentralised. Also, each blockchain is optimised for different qualities, such as security, scalability, decentralisation, speed, and there will always be a disagreement with at least one in the optimum combination.
For instance, Ethereum is decentralised and secure, but it is slow and less scalable. Solana is fast and scalable, but it is less decentralised. Different use cases would require different optimum combinations. Hence, there will always be a demand for multiple blockchains and bridging solutions between them for liquidity sharing.
Interoperability is a no-negotiable feature of the multi-chain network ecosystem. Each blockchain excels in its own unique way. DeFi users interested in using dApps on other blockchains can simply bridge their assets and leverage earning opportunities. This way, these token bridges also bring the theory of comparative advantage into action.
The image below shows the flow of assets across different blockchains via bridges.
Expanded DeFi Opportunities
Bridging assets across blockchains allows users to access decentralised finance platforms on multiple networks, offering a wider range of DeFi services, including staking, borrowing, lending, yield farming, etc.
Bridging also allows users to choose DeFi services on the blockchain they prefer. For instance, a user may stake on Ethereum but engage in lending and borrowing on Solana, play a Web3 game on Avalanche, and transact on rollups to save on fees.
By being able to choose between chains, users can save on transaction fees, achieve a better speed and user experience, and leverage specific dApp functionality present on a different chain with ease.
In 2024, the monthly transaction volume across bridges was between $1.5 billion and $3.2 billion.
Multi-Chain DApp Development
Bridges are also crucial for dApps and DeFi protocols looking to extend their functionality across multiple chains. A non-custodial or trustless bridge integration can be a great bet for a protocol looking for cross-chain security for its users. A popular Web3 game, DeFi Kingdoms, is a multi-chain RPG that utilises token bridges to facilitate the transfer of in-game assets across blockchains.
Once a blockchain can communicate and share resources with other chains, we can have a more interconnected Web3 and a seamless user experience. The distinct capabilities of various blockchains can be combined through cross-chain interoperability to unlock new possibilities and facilitate better adoption.
Risks Associated With Cross-Chain Bridges
Despite their efficacy as blockchain solutions providing cross-chain interoperability, we must consider the potential obstacles and security concerns associated with cross-chain bridging.
Security Vulnerabilities
Bridges are one of the points of vulnerability in the blockchain ecosystem and are prone to exploits and hacks. $3.3 billion worth of assets were either lost or stolen in bridge hacks between 2021 and 2022. The Wormhole exploit and Ronin Bridge hack remain the biggest hacks in crypto history.
Bridges, especially custodial bridges, are prone to a single point of failure as a third party holds the assets. This centralisation means that users must trust the bridge operator to operate fairly and keep funds securely, which, in a way, is counterintuitive to the entire concept of blockchain decentralisation and trustlessness. Even if it is a non-custodial bridge, the user must research and learn to navigate the bridging process easily.
Fragmented Data Across Chains
Since blockchain networks operate as siloed ecosystems that do not naturally share information with each other, the data remains fragmented across different chains. This makes monitoring data collection and analysis complex and arduous. Though bridges act as a link between different chains, they are also the points where the realm of one chain ends and the other starts. Since data never freely flows, bridges are little blackholes that make it difficult to track information across chains.
Obscured Transaction Paths
On-chain transactions that span across chains follow obscure transaction paths. Within a bridge, there are numerous smart contracts and intermediary steps that make it difficult to detect suspicious transactions and illicit activities.
Best Practices for Secure Transfers
Using cross-chain bridges requires a learning curve, and we can do with a quick guide of a few dos and don’ts:
Selecting a Reliable Cross-Chain Bridge
For choosing a trustworthy and secure cross-chain bridge for asset transfers, here are a few things you can keep in mind:
- Choose bridges with robust security mechanisms, rigorous security audits, and a proven track record
- Look for open-source code and transparent documentation of their architecture
- Choose bridges that grant an elevated user experience for easy navigation
- Use multi-signature wallets while interacting with bridges
- Check the number of blockchain integrations and volume of transactions a bridge can handle
- Go for a decentralised bridge where governance and control are in the hands of a large number of participants.
However, one should note that a blockchain architecture is only as strong as its weakest link, and bridges are one of them. A small bug or fault in the smart contract code can cause the bridge to fall like a house of cards. There’s a need for standardising bridge protocols for seamless interoperability. Formal verification techniques can help prove the correctness of the code and prevent vulnerabilities within the bridge architecture.
The Role of Cross-Chain Bridges in a Multi-Chain Future
There’s no denying that the blockchain ecosystem in the future will rely heavily on interconnectedness, a Web2-like user experience, and how simple it will be for non-technical users to use any protocol, bridge, or chain.
Though the bridge infrastructure has undergone many innovations and improvements, it is still inefficient in materialising the above vision. Bridges support a small number of chains and tokens and aren’t completely seamless. Users still need to undergo several steps to finalise a token swap. Asset security remains the biggest concern when transacting assets via a bridge.
However, bridges are crucial for the free flow of liquidity within the crypto ecosystem, better use cases, and resource optimisation. Cross-chain bridges need to enhance their user experience and make user interaction more intuitive.
Beyond bridges, chains are also developing innovations like omnichannel and elastic networks, where chains share liquidity, resources, and assets without any hurdles.
The future is interoperable, simple, and intuitive. Let’s see if bridges mind the gap or not!
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