What is a cross-chain bridge?
Cross-chain bridge = cross-chain without any hassles
Cross-chain bridge = Redefining witch
The world's largest cross-chain bridge Layerzero = PUA
We are all familiar with these golden sentences.
But we can’t teach bad things to those who are new to Web3.
Today we will systematically learn what a cross-chain bridge is.
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💰Cross-chain bridges are channels that connect different blockchains, enabling the transfer of tokens and data between different blockchains. Its purpose is to create interoperability between incompatible blockchain networks, which are independently operated networks that cannot directly share information.
How do cross-chain bridges work?
While there are multiple bridge designs, three approaches stand out as enabling cross-chain asset transfers:
- Lock and mint: lock assets on the source chain and mint assets of equal value on the target chain.
- Destruction and minting: destroy assets on the source chain and mint assets of equal value on the target chain.
- Atomic Swap: Directly exchange assets of equal value with another party on the source and target chains.
Use cases of cross-chain bridges in DeFi
- Asset Migration
Users can easily move assets between different blockchains using cross-chain bridges. This allows them to take advantage of unique DeFi opportunities on different blockchains.
- Expand asset utilization in DeFi protocols
Cross-chain bridges support a wider range of assets for DeFi protocols. Assets on different blockchains can be used for DeFi services such as lending, borrowing, and yield farming, expanding the scope and utility of the ecosystem.
- Enhance portfolio diversification
Cross-chain bridges provide users with more options for portfolio diversification, giving them access to a wider range of tokens and assets across multiple blockchains.
This helps users better manage risk by spreading their investments across different networks and assets.
This knowledge content is provided by @CIAN_protocol Defi Class
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💵Which cross-chain bridges have not yet issued coins are most important to us Mao Zedong?
@Orbiter_Finance raised 10 million
@lifiprotocol raises $23 million, led by CoinFund
@SocketDotTech (Bungee) raises $12 million, led by Coinbase
@LayerZero_Labs raises 293.3 million yuan, led by a16z
Little Bear reminds you that cross-chain bridge = redefining witch, this is no joke, DYOR!
