Understanding Cross-Chain Bridges

May 31, 2022, 12:51PM EDT

• 18 min read

Quick Take

  • As the blockchain space evolves into segregated Layer 1 chains, liquidity and ecosystems become increasingly fragmented
  • While ecosystems can technically be “bridged” by porting code across compatible chains, the liquidity remains isolated across chains
  • Cross-chain bridges are essentially liquidity pools that allow users to move liquidity across supported chains
  • Several cross-chain bridges have surfaced over the past year, and while they fundamentally share the same concept, there are minor differences in their implementations
  • As cross-chain bridges start growing in total value locked, it becomes increasingly important to understand the security assumptions associated with each of these bridges

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