The blockchain industry has seen strong growth in the past few years. The Non-Fungible Token (NFT) sector is disrupting the art market. Decentralized Finance (DeFi) promises a future where people are less reliant on centralized entities like banks. Further, gamify platforms are changing how people game on the internet. This article will explain what Ethereum bridges are and identify some of them.
What is an Ethereum bridge?
This growth is mostly credited to Ethereum, a second-generation blockchain that makes it possible for people to build decentralized applications (dApps). Today, this network has more than 80% of the market share and has been used to build popular platforms like Compound, Maker, and Uniswap.
However, the smart chain industry has grown as the number of Ethereum rivals emerged in the past few years. Some of these blockchains are Near Protocol, Solana, Avalanche, Terra, and Cardano. These networks operate in different methods.
Therefore, bridges are tools that help to connect different protocols so that multiple applications can interact with one another. With a bridge, Anchor Protocol, which is a DeFi app developed in Terra, can communicate with Uniswap. Similarly, VVS Finance, which is built on Cronos, can interact with BENQI, which is created in Avalanche.
How Ethereum bridges work
The concept of bridges has been around for a long time. For example, in the Web 2.0 era, it has been used widely to let various applications communicate with one another. For example, you can now transfer files between OneDrive and Google Drive even though the two are built by two separate companies. Similarly, Meta Platforms have created bridges between Facebook, Instagram, and Whatsapp.
The benefit of bridges is that they remove the barriers that exist in different areas. They also make the internet work more efficiently by un-siloing the industry.
Bridges work in a number of ways. The foundation is that some exchange information locally or remotely. Local bridges exist within the same network, say Uniswap and Aave. Remote bridges are those that use different chains and are more complicated. They are built to lock the token in Chain 1 and then mint a fresh one into chain 2. This happens in a process known as lock-and-mint/burn-and-release. With this in mind, let us look at some of the top Ethereum bridges.
Polygon Ethereum bridge
Polygon is a leading layer-2 blockchain project designed to supercharge applications created in Ethereum’s network. It is also one of the biggest networks in the world, with a market capitalization of over $9 billion. Polygon uses several technologies such as zero-knowledge rollups and dual-consensus architectures.
To work effectively, Polygon has built a bridge between its network and that of Ethereum. Its bridge is the ethereum-virtual machine (EVM) compatible and comprises a proof-of-stake (PoS) and the plasma one. In the first one, deposits are usually instant, although withdrawals can take a while. On the other hand, the plasma bridge supports MATIC movements to other ERC tokens. It has adopted Ethereum Plasma to do this.
Avalanche is another leading Ethereum-killer that has become incredibly popular among developers. It has been embraced by hundreds of developers. For example, its DeFi applications have grown so much such that their total value locked (TVL) has risen to more than $10 billion. Only Ethereum, Terra, and BNB Chain are bigger.
As a result, to boost its performance, Avalanche’s developers have built a bridge that connects to Ethereum. This bridge is built to transfer tokens from Ethereum to Avalanche. Precisely, one can move ERC-20 tokens to C-Chain and vice versa. In most cases, Avalanche transactions will typically take less than a minute, while those of Ethereum can take as much as 15 minutes to complete. There is usually a small fee when handling the transaction, as with all bridges.
Gravity DEX bridge
Gravity DEX bridge is a product that was created for the Cosmos ecosystem. In 2022, the developers decided to change its name to Crescent. It is a bridge solution that enables DeFi transactions across multiple chains like Ethereum, Avalanche, and Solana.
The network charges an average fee of $0.08 and uses the Equivalent Swap Price Model to ensure that the price is a bit consistent. Gravity DEX makes it possible to move ERC tokens to the Cosmos ecosystem and vice versa.
Another part of the Cosmos bridge is known as Emeris. It is a one-stop platform that enables most DeFi projects to run consistently.
Solana is another blockchain project that has become popular among developers and users. It was used to build popular projects like Brave Browser, StepN, and Audius. Inside its network, there are several bridges that have been created to enable interactions between Ethereum and Solana.
One of the most popular Solana bridges is known as Wormhole. Unfortunately, it is not known for a hack that cost investors over $325 million of assets. That hack demonstrated the dangers of using bridges in the blockchain industry. Other bridges between Solana and Ethereum are the REN VM bridge and APYSwap All bridge.
Another Ethereum bridge to consider is the Fantom bridge. Fantom is a leading platform that is also disrupting the blockchain industry. It has hundreds of developers and a TVL of over $5.85 billion. Some of the top applications built on Fantom are Beethoven, Geist Finance, and OxDAO.
Fantom’s MultiChain is a bridge that connects Fantom to other blockchain platforms like Ethereum, Avalanche, Aurora, Moonbeam, Terra, and Solana. It has handled over $74 billion of volume and has a total value locked of over $6 billion.
Bridges have become important parts of the blockchain industry now that the number of chains has also risen. In this article, we have looked at some of the best-known bridges in the industry today. While they play an important part, they are also risky, as evidenced by the huge Wormhole hack. Therefore, you should always be careful when using them.