Understanding Cross-Chain Bridges

Understanding Cross-Chain Bridges


TheBlock
2022-05-31 16:51:35

Quick TakeAs the blockchain space evolves into segregated Layer 1 chains, liquidity and ecosystems become increasingly fragmentedWhile ecosystems can technically be “bridged” by porting code across compatible chains, the liquidity remains isolated across chainsCross-chain bridges are essentially liquidity pools that allow users to move liquidity across supported chainsSeveral cross-chain bridges have surfaced over the past year, and while they fundamentally share the same concept, there are minor differences in their implementationsAs cross-chain bridges start growing in total value locked, it becomes increasingly important to understand the security assumptions associated with each of these bridges