Blockchain Bridges: Connecting Different Networks

Blockchain Bridge enables the seamless transfer of data or tokens between two different blockchain projects.

What is bridge?

While blockchain technology is undoubtedly a huge advance, there are still many areas for improvement. One of the major challenges facing blockchain projects is their limited interoperability. For example, a decentralized application (DApp) created on the Ethereum blockchain will not work on the Bitcoin blockchain.

Blockchain bridge is a protocol that prescribes mining and burning procedures so that the stock of tokens can be constant between two different platforms. Bridges are used to transition between different blockchain protocols.

When a token is locked in one of the blockchain protocols, its counterpart is mined on a second blockchain, ensuring compatibility between two very different protocols. This exchange takes place over a mint-and-burn protocol.

Blockchain bridges are extremely useful for developers because they allow them to take advantage of faster processing speeds on less congested blockchains. One of the most popular examples of a recent successful blockchain bridge is the bridge between Tezos and Ethereum. One of the easiest methods of ensuring blockchain protocol compatibility is to create wrapped tokens. For example, Wrapped Bitcoin tokens (WBTC) are compatible with ERC-20 and can be used in the Ethereum ecosystem. As for Tezos, the blockchain bridge allows Ethereum-based tokens to go through the Wrap Protocol, making them compatible with the Tezos FA2 token standard.

Although blockchain bridges are usually aimed at connecting two completely different blockchains, there are also cases in which sidechains are connected to the original blockchain. This occurs when the parent and child blockchains operate on different consensus mechanisms. The well-known Ethereum blockchain sidechain bridge was created to host the Axie Infinity game. A third-party blockchain called Ronin and the original Ethereum blockchain were bridged so that users of the Ronin blockchain could use ERC-20 and NFT tokens hosted on Ethereum.

Stablecoin protocols are predominantly interested in creating bridges for their blockchains, and especially for tokens such as Tether (USDT), which is growing rapidly in popularity. At the moment, stabelcoins have only been able to expand the number of exchanges that support them, but by successfully creating bridges, they will quickly expand their services.

Blockchain bridges bring a number of benefits to users. Compatibility between different blockchains can allow developers to delegate tasks and improve the performance of their applications.

Some blockchains are better at handling transactions faster, while others are designed to handle more smart contracts simultaneously. Blockchain bridges are a great tool for developers to combine these functionalities and achieve interoperability.

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