As blockchain networks open up a broad range of services such as secure databases, DeFi, cryptocurrencies and NFTs, the use of blockchain has been growing at unbelievably staggering rates. How are blockchain bridges relevant for the future of blockchain? What are the top crypto bridges which support the Ethereum blockchain? The following discussion helps you go through the outline of Ethereum bridges and top examples.
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- 1 Background of Cryptocurrency Bridges
- 2 What are Ethereum Bridges?
Background of Cryptocurrency Bridges
Before you find out the details of best Ethereum bridges, you must take note of the factors which led to the development of blockchain or crypto bridges in the first place. Blockchain technology has been tailored for operating as distinct isolated ecosystems without any scope for interaction with other chains. Such principles could work perfectly in specific use cases. For example, blockchain networks could follow their own principles for economic incentives, vision for growth and governance models.
The silo-based approach in blockchain also ensures ease of developing blockchain networks for distinct use cases. However, the inherent design of blockchain technology does not provide the assurance of interoperability. Without interoperability, users have to encounter a tough time in stabilizing their digital assets. For example, users cannot transfer their money from one cryptocurrency to another if the value of a currency starts falling.
The need to find about top Ethereum bridges by total volume becomes clearly evident as it is quite difficult to transfer money to another cryptocurrency without selling the original investment. It means that you have to convert your crypto assets into fiat currency and then convert them into another cryptocurrency.
Furthermore, a lack of interoperability also creates trouble for cross-border payments or exchanging one cryptocurrency for another. If you think of the future, decentralized blockchain networks will focus on the need for easier interoperability and interactions. The limitations on inter-network data exchange and communication have been gaining profound levels of attention in recent times.
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What are Ethereum Bridges?
The search for a list of Ethereum bridges must start with a definition of blockchain or crypto bridges. Blockchain bridges are basically tools that allow easier and flexible transfer of assets between different blockchain networks. You can go for the transfer without any third party or a central exchange involved in the process. One of the most notable highlights of Ethereum bridges is the fact that they use the same principles as atomic swaps.
You must note that atomic swaps are a specific type of smart contract that can enable exchanging one cryptocurrency for another without the intervention of centralized exchanges. Cryptocurrency bridges like Ethereum bridges not only allow exchanging one cryptocurrency for another but also transfer the value of digital assets among different blockchain networks.
A closer look at the top Ethereum bridges by total depositors could showcase a brief impression of how the blockchain bridges work. Blockchain or cryptocurrency bridges actually use a two-way peg between the two chains to ensure the exchange of asset value. A two-way peg is basically a smart contract that can lock up a specific asset in one blockchain network and obtain an equivalent amount of same asset on another blockchain network.
It works as a check or a treasury for storing value of assets from first blockchain and doling out the equivalent value of assets on the second blockchain network. After locking up the assets, blockchain bridges can facilitate seamless movement between the concerned blockchain networks without any third party.
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Benefits of Ethereum Bridges
Blockchain bridges like Ethereum bridges can facilitate easy communication, data exchange and transfer of digital assets between two blockchains. They can serve many other functions, such as exchanging smart contract calls, off-chain information and decentralized identities. How can the top Ethereum bridges help blockchain users? The following benefits of Ethereum bridges can offer a significant answer to such questions.
Optimizing Network Traffic
Blockchain bridges such as Ethereum bridges play a crucial role in ensuring reduction of traffic on blockchain networks congested with traffic. Ethereum is one of the common examples of highly congested blockchain networks. In such cases, Ethereum bridges can help in distributed traffic across blockchain networks with limited congestion. Therefore, bridges can definitely serve as a significant boost in scalability of blockchain networks.
Each blockchain network follows its own silo-based ecosystem, featuring a distinct set of consensus protocols and rules. Therefore, the limitations of a specific blockchain network become clearly evident. Blockchain bridges can help in dealing with the limitations on direct communications or token transactions between different blockchain networks.
The popularity of top Ethereum bridges by total volume shows how blockchain bridges can fight against monopoly of major players. Cross-chain bridges could help in maintaining market stability. As of now, Bitcoin and Ethereum dominate the cryptocurrency and blockchain market with around 70% of the total market. Therefore, new companies find it difficult to come up with new strategies in the market.
Better Developer Experience
The next important highlight of best Ethereum bridges would refer to the enhanced developer experience. Many developers are working on development of dApps in the Ethereum ecosystem experience many issues such as high gas fees and slow processing speeds. In such cases, blockchain bridges could help in processing the same tokens on other blockchains at lower costs and faster speed. Developers from different blockchain networks can work in collaboration to create new user platforms and applications.
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Working of Blockchain Bridges
The understanding of top Ethereum bridges by total depositors can become easier with awareness regarding the working of blockchain bridges. You can identify how blockchain bridges work by assuming an example of blockchain A and blockchain B. Suppose that you have to transfer tokens to Chain B from Chain A.
In this case, the bridge would work by locking the token on Chain A and mint new tokens on Chain B. You must note that the total number of circulating tokens stays constant and has been divided among two chains. For example, if chain A had 20 tokens and transferred 10 tokens to chain B, then Chain A would still have 20 tokens with 10 locked tokens. The Chain B would have 10 additional tokens now.
It is important to note that owners of the newly minted tokens on Chain B could redeem them anytime. The owners can destroy the minted tokens from chain B followed by releasing them on chain A. Since chain A always maintained a locked copy of the transferred tokens, the value of the tokens would be the same as market price of chain A. Almost all blockchain or crypto bridges follow the “lock and mint” followed by the “burn and release” procedure. The mechanism ensures constant quantity and cost of tokens transferred among two chains.
Types of Blockchain Bridges
If you want to learn about best Ethereum bridges, then you should understand the types of bridges. The two notable categories of blockchain bridges include trust-based and trustless bridges.
Trust-based bridges also referred to as custodial or federation bridges, work like centralized platforms. These types of bridges would need a central entity for operations. Users have to depend on the members of the federation for verifying and confirming transactions. On top of it, the federation members receive hefty incentives for keeping your transactions operational rather than maintaining safety from fraud.
The second category of blockchain bridges, i.e., trustless bridges, is actually decentralized bridges, which utilize machine algorithms for their operations. Trustless bridges work as a real blockchain network, wherein each associated network can contribute to validating transactions. Trustless bridges can also offer improved security alongside flexibility in cryptocurrency transfers.
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List of Top Ethereum Bridges
The guides on Ethereum bridges also draw the limelight to list of Ethereum bridges according to specific factors. Ethereum bridges are classified on the grounds of total transaction volume or the number of depositors. Interestingly, you can find some common players in both lists. A clear overview of the notable entries among popular Ethereum bridges could show how bridges are being fuelled with a massive amount of value.
Here is a list of top Ethereum bridges by total volume of transactions.
The top two bridges, i.e., Avalanche and Polygon PoS, registered transaction volumes ranging from $20 billion to $30 billion. The next players on the list, i.e., Fantom and Axie Infinity: Ronin, registered transaction volumes in the range of $10 billion to $20 billion.
Now, here is a list of top Ethereum bridges by total depositors with many of the names from the previous list.
- Polygon Plasma
- Polygon PoS
- Axie Infinity: Ronin
Polygon Plasma is the leader among top Ethereum bridges with over 150,000 depositors, and Polygon PoS has almost reached the 150,000 mark.
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Popular Examples of Ethereum Bridges
The discussion on top Ethereum bridges would be incomplete without drawing the popular choices into the equation. Here is an overview of some of the most renowned Ethereum bridges in use right now.
The Binance Bridge is one of the popular choices for portability to Binance Smart Chain from Ethereum. Binance Smart Chain is an EVM-compatible blockchain network created by the biggest crypto exchange in the world. The bridge works by wrapping ERC-20 tokens into BEP-20 assets for use on Binance Smart Chain applications.
Avalanche is one of the biggest challenges for Ethereum and is the first entry among top Ethereum bridges by total volume of transactions. The Avalanche Bridge serves as a great resource for transferring ERC-20 tokens to Avalanche from the Ethereum blockchain. It works in a much similar way to the Binance Bridge, and users can access the Avalanche Bridge by using Metamask wallet. Following the bridging of assets, tokens would be associated with a specific symbol. As of now, the Avalanche bridge contract has almost $4.8 billion locked in it.
The next big competitor for Ethereum in the present times would point at Solana. Most important of all, Solana is comparatively cost-effective and faster than Avalanche. The block times on Solana can measure at almost half a second. Users interested in sending ERC-20 tokens to Solana can do the same by using two bridges, such as Wormhole and Sollet.
Tokens transferred to Solana from Ethereum can be wrapped and minted in the SPL token standard through Sollet and Wormhole. The transferred tokens can be used in Solana dApps seamlessly. Wormhole enjoys more popularity with almost $265 million locked in the bridge contract.
Risks with Ethereum Bridges
The discussion on top Ethereum bridges by total depositors and total volume shows that crypto bridges can solve interoperability problems. However, it is also important to review the risks associated with Ethereum bridges before putting them to use. First of all, you have safety concerns emerging from vulnerabilities in smart contracts.
For example, a simple bug in the smart contract code can help hackers in exploiting the vulnerability. Most important of all, bridges connect two different chains and can enable the use of one chain for attacking the other. For example, hackers can take control of the bridge smart contract and carry out a DDoS attack on one of the chains.
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The final impression regarding the list of Ethereum bridges suggests that innovation has no boundaries. The growing user base of Ethereum bridges serves as proof of their adoption. Ethereum bridges are most likely to become the first choices for developers seeking prospects for creating decentralized applications.
On top of it, the web3 revolution might also play a crucial role in fuelling the adoption of Ethereum bridges. The simple working of blockchain bridges alongside safeguarding security of assets gives better opportunities to use them. Start learning more about Ethereum bridges and how they can drive scalability benefits.