To explore the broad concept of cross-chain integration, crypto bridges have emerged as a leading solution. Simply put, these crypto bridges are a development in crypto that helps the easy transfer of digital assets and information between different unrelated blockchain networks.
However, traders and investors need to know the top crypto bridges for their security, speed and usability. With so many options available, it is necessary to evaluate each bridge’s features, supported assets, and associated costs to make the right choice.
This article will examine the necessary competitors in the crypto bridge space, highlight their unique potential and help you make that choice.
Recommended reading: How to Buy New Cryptocurrency Before It’s Publicly Available
Key Takeaway
- A crypto bridge is a function that enables the easy transfer of assets and information from one unique blockchain network to another.
- Crypto bridges are classified into two: Trusted bridges and Trustless bridges
- Crypto bridges create a platform for the exchange of information and assets between blockchain networks, expanding the crypto community and the use of cryptocurrency.
What is Crypto Bridging?
As the name implies, a crypto bridge is a bridge that enables the easy transfer of digital assets and information from one blockchain network to another. Individual blockchain systems usually function in isolation because of their unique protocols and operating systems. By enabling transfer across the blockchain, new possibilities are accessed.
It is like building a bridge between two islands enabling the ease of travel between them. Crypto bridges make it possible for blockchain networks to connect, share information and work together in the process.
The concept of the Blockchain bridge can be traced back to the late ’90s when Stuart Haber and W. Scott Stornetta created a white paper that described how a chain of blocks could be used to create trust networks between different databases.
In 2004, the first bridge was created as a connection between two virtual machines. Interoperability was a main factor in bridge development by allowing users to exchange data between blockchain effortlessly.
The first bridge was only used for research purposes. It was later in 2008 that bridges were used publicly and later recognized by the financial industry which began adopting them for the use of interconnecting networks.
Importance of Crypto Bridge
Crypto bridges have made a lot of impact in the crypto community and have presented a lot of possibilities such as:
Opportunities
The cryptocurrency community has entered into new possibilities with the application of crypto bridges. Usually, users are restricted to the blockchain of their choice with systems that only apply to the cryptocurrencies and DeFi (decentralized finance) applications in use.
Innovation
The isolated operation of Blockchain networks causes developers to build applications that are restricted to a particular network.
This reduces the expansion of the use of blockchain technology in the crypto community. With the advent of bridges, the strength of multiple blockchains can be used to create new financial possibilities and unlock innovative applications.
Cost efficiency
Every blockchain network has its specified transaction fees when trading. With the possibility of a crypto bridge, assets can be moved from platforms of higher cost to ones of lower cost easily for transactions.
Interoperability
The goal of the bridges is to connect different Blockchain Networks enabling the use of assets between them creating a network of interoperability. Without this, the crypto platform will remain fragmented which will limit the efficiency and growth of the crypto community. A crypto bridge removes the need to maintain different crypto wallets for each network.
How is Crypto Bridged?
Although crypto bridges offer the solution of interoperability, the process itself can be complex. Therefore, it is necessary to understand how this digital technology works and how to apply it.
Wrapping
Before a coin is transferred using the bridge, a new coin that is compatible with the bridge network is created. This new coin is attached to the value of the original coin. This process is called "wrapping". The wrapped coin is the currency that can be spent on the new blockchain network.
Transfer
The wrapped coin is safely transferred across the bridge to the new blockchain. The original coin is locked on the original blockchain network and the wrapped coin is transferred to the new blockchain network.
Unwrapping
Once on the other side, the coin is unwrapped and converted to its original form on the new blockchain network.
Classification of Bridges
Before using crypto bridges, it is necessary to understand the different classes of crypto bridges as it will be useful for traders to make informed decisions.
Trusted (centralized) bridges
These are high-security bridges that are usually operated by a central authority. They act as a trusted custodian that holds the assets. The original coins on the source blockchain are locked and an equivalent amount of wrapped coins is issued on the target blockchain.
The transaction security relies heavily on the bridge operator. It is therefore necessary to choose a reputable operator.
Trustless (decentralized) bridges
These types of bridges use smart contracts to automatically lock and release coins. Smart contracts remove the need for a central authority but it is most times more complex and possibly slower in terms of transaction speed. Trustless bridges have been confirmed to have potential benefits but they are not used globally.
One reason for this is that the technology seems complex and may require extra knowledge to be used.
Also, trustless bridges are still being perfected, as they are still in their early stages of development, presenting numerous technical challenges that are still being addressed.
Another reason is that different blockchain networks have different protocols, making it difficult to create a single trustless bridge that can be used for all networks, thereby hindering standardization.
Most of all, many governments around the globe have yet to establish regulations around blockchain technology, making it difficult for organizations to adopt trustless bridge technology.
Unidirectional bridges
A unidirectional bridge is a variation of a trustless bridge that allows one-way communication from one blockchain to another.
9 Best Cryptocurrency Bridges
It is necessary to know the best Crypto bridges to make informed decisions and be strategic in performing safe and secure transactions. The ten best crypto bridges to consider among many others include:
Synapse Protocol
One of the markers of Synapse Protocol is that it provides a user-friendly interface with fast transaction times and competitive fees. They carefully have regular audits by reputable firms such as ChainSecurity for system upgrades and allow multi-signature wallets.
In the aspect of speed and efficiency, Synapses protocol has a fast transaction times because of its optimistic rollup technology which it uses to process high transaction volume properly.
Most times, users may need to pay additional gas fees as Synapse protocol has a competitive transaction fee, although dependent on the network traffic.
Recommended reading: Seven Highly Notable Forks in Cryptocurrency History
Portal Bridge
The goal of Portal Bridge is to connect blockchains beyond the Ethereum Virtual Machine (EVM) ecosystem. It supports chains like Solana, Sui and Aptos with a low fee and simple interface while using "proof-of-burn" for security and a regular audit by independent security firms.
Portal bridge also ensures that transaction times are different based on the situation of the network. This bridge ensures that the user experience is satisfactory as they use a simple interface with clear instructions for cross-chain transfers.
Allbridge
With extensive coin support, Allbridge connects a wide range of EVM and non-EVM blockchains such as Binance Smart Chain, and Polygon with major security features including multi-signature wallets and a decentralized validator network also with regular audits by security firms.
Though compared to some competitors, transaction fees can be slightly higher the user experience is usually straightforward having an interface with clear instructions though it may lack advanced features compared to other bridges.
Arbitrum Bridge
Compared to Ethereum mainnet Arbitrum Bridge offers quick and secure bridging between Ethereum and Arbitrum, with low fees.
They use security from the Ethereum blockchain through a checkpoint mechanism that is regularly audited by security firms while offering fast transaction times using its optimistic roll-up technology to handle a high volume of transactions efficiently.
Arbitrum Bridge has a user-friendly interface designed especially for transferring assets between Ethereum and Arbitrum but still Supports a wide range of ERC-20 coins.
Celer cBridge
Celer cBridge offers a user-friendly interface used for cross-chain transfers with various EVM blockchain lists such as Polygon, Avalanche, and Optimism. While using a secure model to protect assets in their custody, it takes advantage of the security of the underlying blockchain. It has a moderate speed and efficient transaction time with varying transaction fees depending on network congestion.
Hop protocol
With the aim of creating a platform where fast bridging transactions can be made between Ethereum and layer-2, Hop Protocol uses a decentralized network of validators to ensure the security of cross-chain transfers with lower gas fees than Ethereum mainnet gas fees.
Their speed and efficiency are mainly focused on fast transaction time. Though it may be slower for bridging between Ethereum mainnet. The transaction fees are not fixed and may change based on the situation of the network and the particular transfer route used.
Also, users may need to have a little knowledge about DeFi concepts, especially for advanced features, the user interface is made to be generally straightforward with compatibility with platforms ranging from Optimism, Arbitrum, and Polygon which presents a good selection of ERC-20 coins.
Wormhole Bridge
Its confirmed speed and smoothness of transaction set Wormhole Bridge as one of the best bridges available. It uses the speed offered by the Solana blockchain for fast transactions with lower fees compared to the Ethereum mainnet.
It is majorly used to bridge assets between Ethereum and Solana while taking advantage of the security protocols available on the Solana blockchain with an additional guardian network.
The speed of the Solana blockchain makes the processing of high transaction volume easy with accuracy and lower transaction fees compared to Ethereum mainnet. Though there is a growing list of available coins to which it can be applied, the bridge provides a user-friendly interface with clear instructions for cross-chain transfers, especially with Solana Wallets.
Ren Protocol
Ren Protocol provides a wider range of blockchain support, such as Bitcoin and various layer-2 solutions with potentially high transaction fees because of its security model.
It employs a decentralized network of Darknodes and uses multi-party computation for assets in their custody. Speed and efficiency in transaction times can change depending on the network traffic.
It supports a wide range of blockchains such as Ethereum, Bitcoin, and various layer-2 solutions, users may need some knowledge about some advanced features of the interface.
Hyphen
Ethereum and Cosmo such as Cosmos Hub and Osmosis are the main blockchains that Hyphen focuses on, bridging with competitive fees and a user-friendly interface.
It is a decentralized network of validators known as "guardians" to protect cross-chain transfers in addition to regular audits by security firms. Its transaction rate can vary depending on the network situation with a user-friendly interface and clear instructions for cross-chain transfers.
Major Specifications to Consider Before Choosing a Crypto Bridge
With knowledge of the crypto bridge, it is necessary to consider some specifications before choosing the best crypto bridge to use as a trader.
Security
Security is central when selecting a crypto bridge to use. It is essential to consider a robust security measure such as multi-signature wallets to safeguard your assets.
It is necessary to check if independent security audits have been done by renowned security firms because they evaluate the bridge for potential threats and security breaches. Therefore, researching the bridge's track record is a priority.
Transaction speed
For free and quick transactions it is necessary to check the average time it takes for a bridge to complete a cross-chain transfer. The bridge's underlying technology and network congestion can affect transaction times so it is necessary to look for bridges with a proven track record of fast and reliable transfers.
Extra Costs
Hidden costs like gas fees— Network fees used to process transactions on the blockchain both on the sending and receiving sides may apply. These fees may change depending on network congestion.
User Experience
A user-friendly interface prevents confusion and reduces the risk of errors so it is necessary to Look for clear instructions and processes for initiating cross-chain transfers.
Compatibility and Interoperability
It is necessary to Consider which blockchains the bridge can connect to. Therefore, it is necessary to prioritize bridges that are compatible with the Blockchain that you are involved with.
Benefits of Bridging
Bridging can also be used to process the exchange of assets between different blockchain. For example, a trader on one blockchain network may want to send a digital asset such as a cryptocurrency, to another user on another blockchain.
A bridge can be used to process this transfer by allowing the asset to be "wrapped" and successfully transferred in a form that can be recognized between the two networks.
Also, the essence of blockchain bridging is basically to expand the reach of a particular blockchain network and its functionality to the benefit of the crypto community.
Let's say a company wants to use a blockchain for certain internal activity, but also wants to take advantage of a public blockchain network because of its greater security and transparency.
The company can securely link its internal blockchain to the public blockchain, allowing it to access the benefits of both networks using the crypto bridge.
Risks of Bridges
As much as bridging in Blockchain presents many benefits, it also has certain risks and challenges. One major issue is the need to ensure the security and integrity of the bridge, as it serves as a critical point of communication between the two networks.
If the bridge is insecure, it could allow cybercriminals to gain access to sensitive information.
Another concern is finality. This is the guarantee that funds on the destination chain will reflect once they have been sent from the source chain. Without finality, a reversed transaction could occur on the source chain (like a kind of block reorganization) which could cause issues on the destination chain.
Cross-Chain Swapping
Sometimes a bridge is not needed for some basic transactions as a result some crypto wallets, such as Trust Wallet, offer a feature called cross-chain swapping.
Unlike bridging, this is a process whereby your crypto wallet acts as an intermediary to facilitate the transaction using a liquidity pool aggregator—a service that searches for various Decentralized exchanges (DEX) across different blockchains to find the ones with the best rates.
Which is the Better: Bridging or Swapping?
Both actually offer great options but the choice made between using a bridge or swapping depends on your preference, priority or individual needs Although some general considerations can be taken into account before making your choice such as:
Security
Though Decentralized bridges remove the need for a central entity In transactions, it still has its own security risks and so do Centralized exchanges have their own security risks, therefore it is necessary to choose a reputable platform.
Fees
A small fee is usually charged for transactions by Bridges and exchanges which can be different depending on the asset, the amount transferred and finally, the bridge used. The Exchange fee for a swap is usually a percentage of the swap amount, with some additional fees for deposits and withdrawals.
Transaction Speed
Due to how complex the process is, Bridge transactions can be slower but Exchange swaps might be fast depending on the network traffic.
Ease of Use
For beginners, Swapping through a centralized exchange may be easier as it is a simplified process. Bridges might need a deeper knowledge of the technology which may prove difficult.
Recommended reading: Blockchain in the Automotive Industry: The Future of Cars
Summary
Blockchain bridging is a useful and necessary tool for connecting different blockchain networks and processing the exchange of assets and information between them. Bridging to public chains is supported on some crypto exchange platforms through products and can be utilized to your advantage.
As provided, there are a couple of crypto bridges in the crypto industry to make day-to-day transactions easier for users and traders. However, it is necessary to choose the best kind using the main specifications for selection.
Frequently Asked Questions (FAQs)
Crypto Bridge is a development in the crypto space that helps the easy transfer of digital assets and information between different unrelated blockchain networks.
A crypto bridge is necessary for a trader because it makes transactions easy, especially between two isolated Blockchain networks.
No, they are not the same. Crypto swapping is a process whereby the trader’s crypto wallet acts as an intermediary to facilitate the transaction using a liquidity pool aggregator—a service that searches for various Decentralized Exchange (DEX) across different blockchains to find the ones with the best rates.
In contrast, a crypto bridge is a development in the crypto Community that helps the easy transfer of digital assets and information between different unrelated blockchain networks.
The best crypto bridges to choose from among others are Portal Bridge, Arbitrum Bridge, Synapse Protocol, Allbridge, and Celer cBridge.
Disclaimer: This article is intended solely for informational purposes and should not be considered trading or investment advice. Nothing herein should be construed as financial, legal, or tax advice. Trading or investing in cryptocurrencies carries a considerable risk of financial loss. Always conduct due diligence
