A crypto bridge (or bridge) is a protocol that allows transferring digital assets or data between two different blockchains. This solves the interoperability problem, as each blockchain has its own rules, formats, and mechanisms.

How it works

A bridge typically works by locking assets on the original (source) blockchain and issuing equivalents on the destination (target) blockchain. This process ensures that the assets are not duplicated, but simply represented on the new blockchain.

Clear Example: Ethereum and Binance Smart Chain (BSC)

Initial situation: You have 1 ETH on Ethereum, but you want to use this ETH in a DeFi application on Binance Smart Chain (BSC), where fees are lower.

Step 1: Locking

You use a bridge, such as the Binance Bridge. Your 1 ETH is sent to a smart contract on Ethereum, where it is locked.

Step 2: Issuance

A tokenized version of this ETH, called BEP-20 ETH (or ETH on BSC), is created and sent to your wallet on Binance Smart Chain.

Usage

You can use this ETH on BSC in DeFi applications, such as PancakeSwap, for low-fee transactions.

Back

If you want to get your ETH back on Ethereum, the bridge will destroy the BEP-20 ETH on BSC and unlock your ETH on Ethereum.

Why are bridges important?

Interoperability: Allows blockchains to work together.

Cost optimization: You can use blockchains with lower fees.

Access to other ecosystems: You can participate in projects or services on different blockchains.

Warning

Bridges can be vulnerable to hacks because they handle large amounts of assets and often rely on complex smart contracts.

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