TL;DR: Bridges are protocols that help users move assets from one blockchain to another at a lower cost and faster speed.
Web3 users have access to multiple DeFi dApps with the option to trade, stake, yield farm, provide liquidity, lend and borrow, participate in derivatives, bridge tokens, and more with DappBay listing over 482 DeFi dApps on BNB Chain in the last year.
Some of the most popular DeFi dApps on BNB Chain in users, TVL, and transactions include PancakeSwap, 1Inch, Uniswap, Angle Protocol, Sushiswap, Venus, Thena, Wombat, and Ribbon Finance.
Bridges play an important role in helping users realise the full potential of the decentralized web from token transfers to accessing new dApp protocols built on different blockchains.
What are Bridges?
Bridges are protocols that help users move assets from one blockchain to another. In the physical world, bridges help travelers cross rivers and navigate across the land. Similar to how bridges function in the physical world, Web3 bridges help users bridge digital assets across different blockchains opening up a world of possibilities.
Transferring assets between blockchains is no easy feat. Blockchains are built with different programming languages and with different rules. This means blockchains can’t interact or communicate with each other because the systems are so different. A token available on one blockchain may not be available on another blockchain.
Importance of Bridges
Network congestion on popular blockchains can lead to expensive gas fees and slower transfers. Bridges play an important role in enabling users to transfer assets across blockchains. Web3 users can transfer tokens at higher speed and lower gas costs by bridging tokens to a different blockchain.
Web3 users bridged over $9.6 billion in crypto assets in the last 30 days across all networks including BSC, Ethereum, Polygon, Arbitrum, Optimism, and more.
Bridges on BNB Chain contribute towards significant volumes and transactions on the blockchain. Bridges account for $815 million in total monthly volume on BNB Chain according to DeFillama. USDT was the most bridged token accounting for over 67% of all tokens bridged on BSC.
Some of the importance and advantages of bridges include:
- Interoperability between different blockchains
- Faster and cheaper transfer of crypto assets
- Cross-chain collateral (borrow on one chain and lend on another chain)
- Reduces congestion on blockchain networks
- Access protocols on different chains
- Holding and using crypto assets on their native blockchain (such as BNB on BSC),
Most Popular Bridges on BNB Chain
The most popular bridges on BNB Chain include LayerZero Labs, Axelar, Celer Network, and Wormhole.
1. LayerZero
LayerZero is an omnichain interoperability protocol designed for lightweight messages passing across chains. LayerZero provides authentic and guaranteed message delivery with configurable trustlessness. Messages in LayerZero are sent and received by LayerZero Endpoints, which handle message transmission, verification, and receipt. LayerZero is also a member of the BNB Chain DeFi League.
2. Axelar
Axelar delivers secure cross-chain communication for Web3. Axelar is built on proof-of-stake and secure cross-chain communication means you can build a complete experience for your users that lets them interact with any asset, any application, on any chain with one click. Axelar enables secure, any-to-any communication across blockchains, regardless of consensus mechanism or message payload. Cross-chain dApps built on Axelar are truly permissionless, meaning that their transactions cannot be censored by any oracle, relayer, or validator. Axelar is based on the same proof-of-stake security model as many of the chains it connects.
3. Celer
Celer cBridge is a multi-chain network that enables instant, low-cost, and any-to-any value transfers within and across different blockchains and different layer-2 scaling solutions on top, such as Optimistic Rollup, ZK Rollup, and sidechains. cBridge introduces the best-in-class cross-chain token bridging experience with deep liquidity for users, highly efficient and easy-to-use liquidity management for both cBridge node operators and Liquidity Providers who do not want to operate cBridge nodes and new exciting developer-oriented features such as general message bridging for cases like cross-chain DEX and NFTs.
4. Wormhole
Wormhole Network is a generic message-passing protocol connecting high-value blockchains together, with applications leveraging the core messaging layer to facilitate interoperability between ecosystems. Secured by 19 guardians, developers are able to leverage the protocol to send arbitrary data cross-chain including tokens, NFTs, oracle data, governance decisions, and more. Recent implementations of Wormhole include the Portal and NFT bridge, allowing for seamless asset transfers across supported chains. Wormhole is designed to allow for fast consensus, easily extensible, and upgradeable design to connect to more chains that allow developers to build on top of Wormhole easily.
How to Use a Bridge?
Web3 users can select and use a bridge to transfer tokens such as BNB, WBETH, UNI, and more in 6 simple steps.
- Select the bridge you want to use based on the tokens and blockchain you want to access.
- Select the network you want to bridge tokens from and the network you want to bridge your tokens to. For example, you can choose to bridge assets between sidechains, between L1 and L2 blockchains, as wrapped assets, and more.
- Select the asset and how much you want to bridge.
- Review the transaction, estimated time, and fees.
- Make sure you have enough gas fees to cover your bridge transaction.
- Click on the ‘bridge tokens’ option and wait for your bridged tokens to arrive in your wallet.
Risks of Bridges
While bridges play an important role in the interoperability of blockchains, using bridges can also be extremely risky. According to a Chainalysis report, over $2 billion was estimated to be stolen from Web3 users across 13 different cross-chain bridge hacks. Bridges tend to have millions of dollars worth of crypto assets locked on the smart contracts and become high-priority targets for hackers. According to Chainplay's Crypto Crime Report, BNB Chain is a common target for crypto crime because of the active number of users on BNB Chain.
Some of the risks involved in using bridges include:
- Poor security can lead to the bridge getting hacked.
- Flaws in smart contracts can lead to exploits.
- Malicious actors running the bridge with the intent to deceive users.
- Vulnerabilities in the blockchain or the underlying blockchain are hacked.
- Phishing scams that imitate original bridge protocols.
- Mistakes during bridging can lead to loss of assets.
Pro Tip: Use the Red Alarm feature to filter out and avoid risky bridge protocols on BNB Chain.
Enjoyed reading this? Don’t forget to check out how to earn passive income with these 20 dApps and New dApps on BNB Chain. If you’re into infographics, check out season 6 of the Most Valuable Builder dApps.
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