Bridges are an essential component of the blockchain infrastructure that enables interoperability between different networks. However, the wave of cyberattacks on bridges in 2022 that cost more than $2 billion in lost assets has raised questions about the security of the bridges.
Blockchain Bridges: What are they?
A blockchain bridge is a technology that bridges two blockchains and allows data or value to move between them. Interoperability that might otherwise be segregated due to incompatibility is made possible through blockchain bridges. This interoperability fosters decentralization in the industry by giving customers access to new protocols and gives developers the capabilities to create and work on new products across numerous blockchains. It offers information and money with an effective means of transmission. Future success will depend on the ability of many new blockchains to interact as they emerge and develop with their various use cases and communities.
A custodial bridge option, Stably Bridge
Stably is a partner in Nevada-based trust company Prime Trust. Anyone can transfer their digital assets between blockchain networks using Stably Bridge. As an example, let’s use Stably USD ($USDS) to show how the Prime Trust API was used to create Stably Prime. A person can “burn” their $USD using Prime Trust, which credits their account with the appropriate amount of USD credits to convert each $USD into real USD. They can then “mint” $USDS on a different blockchain of their choice using this USD. This technique is completely safe and legal because there is a genuine equivalent in USD. Also, since it is based on the Prime Trust API, a hacker would have to compromise Prime Trust, which is challenging.
Exploring Possibilities to Improve Blockchain Communication
There are other methods of communication between blockchains besides bridges.
Based in Vancouver, Canada, LayerZero transfers data or cryptocurrency assets through low-level communication between blockchains. Although LayerZero is a communication primitive that serves as a bridge to transfer assets across blockchains, it is not necessarily a bridge itself.
With the ability to intelligently route any asset on any chain to any asset on another chain, LI.FI is a state-of-the-art bridge and DEX aggregator. In a single solution offered as an SDK, widget, or API, we’ve introduced support for 13 bridges across 15+ EVM-enabled chains, along with all DEX aggregators and DEXs on those chains.
Conclusion
In short, this sector is ready to enter a new phase of development and opportunity and can attract the next billion users to its ecosystem. We can overcome the barriers to blockchain adoption and build a more open and accessible platform for all using the power of cooperation and invention. By focusing on user education, providing a great experience, and continuing to develop innovative technologies like non-custodial bridging, we can harness the full potential of blockchain and usher in a new era of decentralized finance and applications.
