Blockchains are typically designed to operate as discrete systems where validators are responsible for securing it and ensuring consensus on that chain alone.
Bridges are software protocols that allow these systems to communicate with each other and to connect two otherwise unconnected blockchain platforms. They allow users to send assets, messages, or data from one blockchain to another without compromising the integrity of the overall token supply or interrupting blockchain consensus.
Bridges emerged as a solution to the problem of blockchain interoperability, eliminating constraints on the transfer of assets and information between chains. Also known as a cross-chain bridge, examples include Wormhole, which bridges Solana and Ethereum, and the Polygon Bridge, which bridges Polygon and Ethereum.
History of bridges
Following Ethereum’s launch in 2015, it quickly became a hub for decentralized applications (dapps). However, it eventually became evident that Ethereum couldn’t scale according to the pace of demand as the network suffered from congestion during peak usage.
In time, other smart contract platforms launched that offered faster throughput. However, as isolated systems, it proved difficult to persuade users and developers to leave Ethereum. While a dapp may run more quickly on a different blockchain, it would lose access to Ethereum’s large established user base.
The first bridges were launched in 2020 by smaller chains, such as Syscoin and NEAR Protocol, who would benefit from interoperability with the many existing dapps on Ethereum.
Since then, bridges have been in operation between all major blockchain platforms, allowing more freedom in the flow of assets and information and reducing dependence and congestion on single networks.
How do bridges work?
Most bridges operate using some variation of a mint-and-burn mechanism. When a token or other asset leaves the originating blockchain, it is either frozen or burned on exit, and a corresponding token is created on the destination chain.
Similarly, when the asset returns to the originating blockchain, the duplicate token is burned on the destination chain. On the originating chain, the asset is either unfrozen or re-created, helping maintain the correct token supply.
A bridge may allow the free transfer of assets between two blockchains, or it may have specialized functionality. For example, Solana’s Wormhole bridge or the Avalanche bridge are bi-directional bridges allowing anyone to move Solana or Avalanche assets respectively to and from Ethereum. However, Wrapped Bitcoin specifically allows users to send BTC to and from Ethereum and does not support additional assets or blockchains.
Trusted vs. trustless bridges
Blockchain bridges can be divided into two different categories, both governed differently.
A trusted bridge is typically run by a known entity, requiring the user to trust another party with their assets, or data, when using the bridge. For example, to bridge BTC to ETH using Wrapped Bitcoin, users’ BTC funds are held with Bitgo, a digital asset trust company and custodian.
In contrast, trustless bridges are designed to operate autonomously using smart contracts. Activity on trustless bridges is typically managed in a similar way to the blockchain itself where a set of validators need to reach consensus over transactions. Validators are incentivized to ensure the integrity of bridge activity through rewards and penalties. Examples of trustless bridges include the Arbitrum Bridge and the Polygon Bridge.
Benefits and risks of bridges
Bridges have allowed more interoperability within the blockchain space and enable users to move funds and data across a variety of blockchains. This allows users to take advantage of lower fees, faster transactions, or other unique features offered on other blockchains. Bridges help create a more liquid Web3 ecosystem and foster development activity by making it easier for developers to test the relative strengths of different platforms.
However, the design and implementation of bridge technology is still a relatively new field, and the sudden influx of users and funds has made them prime targets for hacks and fraudulent activity. In 2022, bridges became the most targeted protocols for hackers. Solana’s Wormhole and Axie Infinity’s Ronin were two examples of well-known bridges that were hacked.
The type of risk may be different depending on whether the bridge is trusted or trustless. With a trusted bridge, the risk is that the bridge operator could act maliciously, or the custodian of the bridge funds could be attacked by hackers.
Trustless bridges may be vulnerable to majority attacks, particularly if the validator set is made up of a smaller group. Attackers will also seek out bugs or insecurities in the bridge smart contracts (which can be particularly complex) to find a way of draining funds. Since you need smart contracts on both blockchains to build a bridge, there are more attack vectors and points-of-failures within their code.
To mitigate the risks, security researchers advise taking precautions such as researching the underlying bridge security and not leaving funds locked in bridges for longer than is necessary.
- A bridge is a protocol enabling blockchain interoperability. Bridges connect blockchains to transfer assets and data in one or both directions.
- Bridges are either trusted, meaning they’re operated by a centralized entity, or trustless, operated by a decentralized network.
- Both types of bridges enable the benefits of interoperability; however, each comes with risks, such as smart contract failure or fraud.