Cross-chain bridge seeding episode: How do I get my assets to flow across the chain

The old blockchain performance growth can’t keep up with the scale expansion, and it takes a long time for the new chain to re-establish a perfect ecology, cross-chain bridge can solve exactly these problems.

Recently, the hot high APY mining on Fantom has made many DeFi farmers who pursue high returns go to the gold across the chain, although a large number of users reflect that the cross-chain time is long and the operation is laggy, but it still does not affect its hotness. Its official claim is that the total transaction volume has exceeded 10 million at present.

Why do you need cross-chaining?
Starting from DeFi, which currently has the largest number of users, according to the statistics of DeFi Llama, the lock-up volume of DeFi on Ether has exceeded $100 billion, and other public chains such as BSC, Solana and Avalanche have also attracted $49 billion, which can no longer be ignored.

Although many public chains are already quite large in terms of funding, different chains are like silos, and assets on different chains cannot be freely exchanged. In addition, many emerging public chains are still missing a lot of infrastructure, such as stablecoins, neither native stablecoins collateralized by fiat currencies issued by strong centralized institutions like Tether and Circle, nor DAI, which are based on relatively less volatile price fluctuations such as ETH cryptocurrencies as collateral and decentralized stablecoins issued through overcollateralization.

Therefore, it is necessary to introduce assets from other chains into its own public chain through cross-chain. Among the common cross-chain methods, the most common is various decentralized cross-chain asset bridges, in addition to cross-chain coin withdrawals in centralized institutions such as exchange wallets.

Cross-chain Bridges
A cross-chain bridge is a connection to transfer tokens or data between blockchains. Two chains can have different protocols, rules and governance models, and a cross-chain bridge provides a compatible way to interoperate securely between them.

How do two separate blockchains know what is happening on the other chain? This is really a prophecy machine problem. The simplest current solution is to have multiple nodes listening to contract events on the blockchain at the same time, and when the vast majority of nodes agree that they have seen the event, then the nodes can be considered to have reached consensus among themselves, triggering the next event in the sequence. Cross-chain bridges can be classified into the following categories based on the way consensus is reached and whether or not they need to be hosted.

Escrow + centralization (e.g. centralized exchange cross-chain, WBTC, etc.)

Escrow + POA (proof of authority)

Hosted + PoS (proof of interest) (Matic, xDAI)

Hosted + MPC (Multiparty Computation) (Thorchain, Anyswap)

Non-custodial + MPC (Multichain)

Cross-chain bridges for centralized exchanges are the most user-friendly, but they can also have a single point of failure. Most cross-chain bridges host user assets, and how consensus is reached is also important for cross-chain bridges and relates to the security of the hosted assets. Current cross-chains are also gradually moving towards unescrowed.

Multi-chain tokens

To use assets from one chain on another chain, it is necessary to have the same asset on both chains, forming a multi-chain token. When a new asset is generated on the target chain, the asset on the old chain can be destroyed directly or pledged in a specific contract. Each multi-chain token implementation can be built on top of any of the above escrow and consensus mechanisms. yearn.finance founder Andre Cronje classifies multi-chain tokens into the following four types. The following is an example of cross-chaining assets from ethereum to Fantom.

Balance float

If a token is to be bridged from Ether to the Fantom network, first the token on Ether is locked and then the bridge is notified to transfer the corresponding token to the recipient on Fantom. The bridge contains the maximum supply of tokens, and the user’s usage process does not involve the minting and destruction of tokens.

Minting/Destruction

If this method is used, when tokens are destroyed on Ether, the corresponding tokens are minted on Fantom. Likewise, when destroyed on Fantom, new tokens are minted on Ether.

Liquidity Swap

Literally, there needs to be liquidity and intermediate tokens. For example, converting USDC (Ethereum) to USDC (Fantom) in anyswap requires liquidity on Fantom with USDC (Fantom) and anyUSDC. USDC (Ethereum) is first converted to anyUSDC (Fantom) and then to USDC (Fantom). The whole process does not require hosting user assets, only liquidity.

Packetization + Casting/Destruction

This is a combination of the second and third cross-chain approach. Still the same example, first pledging USDC will get anyUSDC, destroying anyUSDC (Ethereum) and casting anyUSDC (Fantom), and then exchanging anyUSDC (Fantom) to USDC (Fantom) through the liquidity pool.

Commonly used cross-chain bridges
Multichain.xyz (Anyswap)

Multichain.xyz is mainly for cross-chaining between platforms that support Ether Virtual Machine (EVM), developed by Andre Cronje, founder of yearn.finance, and Anyswap team based on Anyswap SMPC Network, and is one of the most widely used multi-chain cross-chaining platforms. The biggest advantage of Multichain.xyz over other platforms is that it supports developers to deploy their own cross-chain tokens.

As of May 13, Multichain.xyz has supported cross-chaining of 263 tokens in ten blockchains, with network security maintained by 30 nodes with $535 million in funding.

Multichain.xyz has broad compatibility and is likely to develop into one of the most widely used cross-chain bridges where developers have full autonomy and anyone can define their own cross-chain tokens.

However, Multichain.xyz cross-chains usually cannot independently form a common asset on the target chain, and anyUSDC (Fantom) in the above example would also be exchanged in the liquid pool for a more commonUSDC (Fantom) on Fantom. This is how cross-chains without escrow can be achieved.

Cross-chain bridge seeding episode: How do I get my assets to flow across the chain

RenBridge

RenBridge is mainly used for cross-chain between traditional public chains such as BTC and smart contract platforms such as Ether and BSC.Ren Protocol’s cross-chain consists of two main components, RenVM for developers and RenBridge for users.RenVM is a decentralized hosting platform based on secure multi-party computing.The miners who keep RenVM running are called The miners who keep RenVM running are called Darknodes, and developers can choose to integrate RenVM to support their cross-chain assets. Users can cross-chain native assets such as BTC to smart contract platforms directly through RenBridge, thereby unlocking asset liquidity between blockchains. RenBTC is also the most widely used BTC-anchored coin issued in a decentralized manner, with 11,690 currently in circulation on ethereum.

Currently RenBridge only enables cross-chain transfer of four public chain assets – BTC, BCH, DOGE and ZEC – to Ether and BSC. Comparatively speaking, the development cost of RenBridge cross-chain is higher because the nodes need to pledge REN tokens and the scale of cross-chain assets is limited by the market value of REN.

Cross-chain bridge seeding episode: How do I get my assets to flow across the chain

Poly Network

Poly Network is not limited to asset cross-chain, but can realize not only the cross-chain of homogeneous and non-homogeneous tokens (NFT), but also the cross-chain of arbitrary information between heterogeneous chains, maximizing the value transfer capability and application scope of blockchain. For example, in collateralized lending, the security of user debt positions can be secured by cross-chain margin. By adopting cross-chain technology, projects on Ethernet do not need to redevelop on the new chain to lock assets and send deposit messages to the Ethernet chain, and smart contracts on Ethernet will verify the legitimacy of the messages, thus realizing cross-chain collateral.

Currently, PolyBridge already supports cross-chain for 44 assets on public chains such as Ether, BSC, Heco, Neo, Ontology, etc. PolyBridge can directly implement direct cross-chain between assets on BSC and Heco, while Multichain.xyz usually requires Ether for transit.

Cross-chain bridge seeding episode: How do I get my assets to flow across the chain

ShuttleFlow

Conflux develops asset cross-chain protocols, uniting Conflux ecosystem participants, such as wallets, custodians, decentralized trading platforms, etc., to form cross-chain asset custody alliances, completing cross-chain asset mapping with 2/3 multiple signatures. shuttleFlow can complete flexible cross-chain between multiple chains by using Conflux chain as a relay bridge. For example, to cross-chain ETH to BSC, you first need to cross ETH to Conflux and then cross out from Conflux to BSC.

Asset-Specific Cross-Chain Bridges
In addition to these general cross-chain bridges, there are also some designed for specific asset cross-chains.

Binance Bridge: It can be used without registering a Coinan account, mainly for introducing assets into Coinan chain and Coinan smart chain, supporting cross-chain of BTC, ETH, BCH, DOT, FIL, ATOM, ADA and other assets.

xPollinate: Support the interchange of funds on Polygon, BSC and xDAI chains, which can transfer the assets supported by BSC to Polygon and xDAI.

Popsicle: Collaborated with YFI (yearn.finance) founder Andre Cronje and the Tether team to launch the first wrapped (Wrapped) version of fUSDT, the first and only official Tether cross-chain USDT.

Dex self-built cross-chain bridge: Mdex as the largest project on Heco, its assets can rely on the centralized cross-chain support of the FireCoin exchange, but there are also some projects where FireCoin does not support punching and Mdex has demand, so Mdex has also built its own cross-chain bridge, currently only FEI, TRIBE, SHIB can be cross-chained from Ether to BSC and Heco.

Public chain projects build their own cross-chain bridges: Some projects will issue tokens to one chain, and then gradually move to other chains according to demand. For example, Harmony (ONE), the tokens were initially issued on the Coinan chain, and then built its own cross-chain bridge from BEP2 to ERC20 for ONE.

Conclusion

The growth of old blockchain performance cannot keep up with the expansion of scale, and it takes a long time for new chains to re-establish a perfect ecology, cross-chain bridges can solve these problems exactly. With the maturity of blockchain technology, various forms of cross-chain bridges have been operating between blockchains to solve interoperability problems between blockchains.

Among the existing cross-chain bridges, Multichain, which has better compatibility and autonomy, is currently in the lead. Multichain is actually a combination of cross-chain and AMM, which also reflects the combinability of DeFi.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/cross-chain-bridge-seeding-episode-how-do-i-get-my-assets-to-flow-across-the-chain/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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