New infrastructure under multi-chain prosperity

cross chain bridge development

In the past two years, , NFT, GameFi and other upsurges have opened up people’s imagination of Ethereum. We are the first to see application scenarios with practical needs on Ethereum, and Ethereum has also become a well-deserved “big brother” in the public chain field. .

However, with the rapid development of the ecology, the performance problems of Ethereum have become increasingly prominent. Some emerging public chain projects with lower fees and shorter confirmation time, such as Solana, Avalanche, Cardano, Terra, Cosmos, etc. seized the opportunity and ushered in explosive development, and users and funds began to use other lower cost public chain projects. Chain transfer. Now the crypto world has entered an era of multi-chain coexistence, and gradually formed a situation in which Ethereum is the core, other public chains are in full bloom, and the stars are over the moon.

However, due to the incompatibility of different blockchain data, the isolation of information, and the “isolation” of many types of encrypted assets from each other, it is difficult to achieve asset interaction, which brings a lot of inconvenience to users, and also leads to very low capital utilization efficiency. Especially when there are more and more blockchain protocols and more frequent asset interactions, people urgently need a new type of new technology to enable interaction between different chains.

In response to this problem, the Bridge Smart Contract Development Services came into being. So, what exactly is a cross-chain bridge? Is it safe to use? Is it a potential track again?

What is a cross-chain bridge?
With the continuous development of blockchain technology, public chains have emerged one after another, but different public chains have different assets, protocols, rules and governance models, just like isolated islands. What if I want to transfer assets from chain A to chain B?

The most direct way is actually to withdraw coins across the chain, but this method is cumbersome and will generate multiple handling fees, especially when the Ethereum network is congested, the cost can easily cost hundreds of dollars.

In addition to cross-chain coin withdrawal, another common way to achieve inter-chain asset transfer is to use cross-chain bridges. As the name suggests, a cross-chain bridge is a bridge tool that connects different blockchains, and it provides a way to communicate and be compatible with each other and to interoperate between two parties.

Of course, a cross-chain bridge can achieve much more than that. Through the cross-chain bridge, you can mortgage and borrow ADA on Ethereum’s DeFi, and you can also circulate and the Flow-based NBA Topshot NFT on Ethereum … It can be seen that for ordinary users, using cross-chain Bridge, assets can interact freely, which reduces while improving transaction speed, and provides a better experience. From a macro perspective, the emergence of cross-chain bridges improves the productivity and practicability of existing encrypted assets, and reconnects the fragmented on-chain ecology into a whole, which can promote the formation of a multi-chain prosperity situation.

So, how exactly does the cross-chain bridge work? WBTC (Wrapped Bitcoin) is an anchor currency of Bitcoin. It is based on Ethereum and can be exchanged 1:1 with Bitcoin. Generally speaking, it is the ERC-20 version of , which aims to use Bitcoin as an encrypted asset. Liquidity and stability are brought into the Ethereum ecosystem.

The operation of WBTC requires three participants, the WBTC DAO, the acceptor and the custodian. The user sends to the acceptor and requests to exchange for WBTC; the acceptor checks the user through KYC/AML, then initiates a Mint coinage request to the WBTC smart contract, and then sends the user’s to the custodian ; after the custodian receives the BTC, it sends a message to the smart contract Minting request; the contract sends WBTC to the acceptor through the request; the acceptor sends WBTC to the user.

WBTC represents a way for a bridge to realize cross-chain assets, that is, to build a bridge channel between two blockchains, to host native assets on this bridge, and at the same time, one chain obtains asset transactions on the other through an oracle machine. situation, map to another chain in a 1:1 ratio.

Another way is: through cross-chain aggregation application Swap, by aggregating the liquidity of assets on different chains to Build a cross chain bridge transaction pool, so that users can complete asset exchange on different chains in the pool. Common projects include AnySwap, Multichain.xyz et al.

The cross-chain bridge solves the just-needed problem of user asset transfer. At the same time, it can also alleviate the problem of insufficient performance of the underlying public chain. With the continuous development of various applications, the status of the cross-chain bridge as a blockchain infrastructure will become more and more prominent. According to incomplete statistics, there are currently more than 100 cross-chain bridge projects in the market, which have begun to take shape.

Will the cross-chain bridge become a potential track?
According to Dune Analytics data, as of April 11, 2022, the total value locked (TVL) of the 18 major cross-chain bridges in Ethereum has reached approximately $19.17 billion. Among them, Polygon Bridges ($5.51 billion) currently has the highest TVL, followed by Avalance Bridges ($4.968 billion), followed by Arbitrum bridge, Fantom AnySwap Bridges, etc. The TVL of the top ten bridges has exceeded 100 million.

Although the cross-chain bridge has begun to take shape in the market, its development is still in its infancy, and there are still many problems that need to be solved in practical use. First and the foremost is the issue of safety.

Ideally, the cross-chain bridge can not only meet the needs of asset interaction, but also have extremely high security. On the premise of ensuring the transparency of the cross-chain environment, it is better compatible with various public chain protocols, applications and .

But in fact, cross-chain bridge security accidents occur frequently, which can be regarded as the hardest hit area in the field of encryption. On March 29, Ronin, the exclusive side chain of Axie Infinity, announced the theft of $624 million worth of encrypted assets, which is also the most costly cross-chain bridge security incident to date. With the increase in the demand for interaction on the chain and the expansion of the scale of cross-chain funds, the cross-chain protocol has become a new “sweet pastry” in the eyes of hackers.

Looking back at the cross-chain attack methods that have appeared in history, including counterfeit currency , fake websites, etc., they basically revolve around private key and contract loopholes. More technical analysis will not be carried out here. In essence, the existence of the cross-chain bridge itself brings scalability to the multi-chain ecosystem. According to the “impossible triangle”, this will inevitably increase the degree of centralization and security risks. .

Of course, many cross-chain bridge projects are also trying to avoid some potential attacks by adopting fraud proofs, light clients, etc. The development of technology does not happen overnight, we might as well give it some time.

Epilogue
Under the circumstance that a single blockchain cannot meet the needs of scale expansion, and the new chain needs time to build a perfect ecosystem, various cross-chain bridges operate between different public chains and L2, which solves the problem of capital flow and provides users with benefits. It has brought great convenience and has become a new outlet.

However, this track still faces many challenges, and users need to do a good job in risk control. When using a cross-chain bridge, it is recommended to choose a cross-chain bridge with a TVL higher than USD 1 billion and a relatively stable TVL rate of change; and a cross-chain bridge with moderate transfer fees and asset interaction speed.

Ouyi also launched its own cross-chain product — OKC cross-chain bridge. At present, the OKC cross-chain bridge can provide asset Cross chain bridge development services for , TRON and other networks, support more than 20 mainstream assets such as USDT , BTC, , DAI, etc., to meet the needs of users for asset interoperability. You can click [More] — [Cross-Chain Bridge] on the Ouyi official website or APP homepage to experience it.