How do blockchain bridges work?

It is possible to define these powerful connectors in a very simple way, by describing the function they fulfill. As its name indicates, they are in charge of connecting blockchains that by definition are separated or excluded from each other.

Build a token bridge This connection that is made through them, allows you to send tokens from one specific chain to another and gives a new meaning to Andre Cronje’s phrase.

Using a bridge, commonly known by its English name “ bridges “, any user can transfer their liquidity from one blockchain to another in a permissible manner, without the need to provide their data and for a low cost . But, before we get fully involved with the bridges, let’s stop to review in what world, very different from the current one, they landed.

The pre-bridge era

The title does not allude to such a distant time, although as one of my mentors says “a week in DeFi , are months in the real world”, therefore speaking of the beginning of 2020 sounds like a past decade.

Those who participate in them abide by rigid and clear rules, previously established in the consensus of creation and validation of blocks. It is these rules that make it possible to eliminate the need for a third party to certify each movement.

Having that each actor is subject to “the law” established by the code, gives rise to users trusting each other, interacting not with one another, but with an address established in the blockchain.

Connecting the blockchain with the ecosystem

Two solutions were born here , oracles and bridges , which are the focus of this article.

Oracles are decentralized developments that are within a blockchain , and through their powerful APIs, they are in charge of consulting data from the outside world and sharing it with the blockchain in a secure way. The classic example is the price of a non-crypto-native asset, for example the price of gold. A token that follows the price of gold would obtain it through an oracle that consults the information on the internet and delivers it to the blockchain in a secure manner, complying with the necessary protocols.

But it is not only necessary to connect the blockchains with the outside world, but also with each other. And here, bridges appear , saving blockchains from their peer-to-peer disconnection.

types of bridges

You probably think that sending crypto from one blockchain to another is not an easy task . If you have thought about it, you are right.

Each chain of blocks , beyond the compatibility that it may have with other networks, has its own structure and above all, its own coding . So, for example, the Ethereum blockchain is not set up to simply read, understand or process a Bitcoin or a Terra network coin.

A perhaps simpler system, it was implemented to build bridges between different blockchains, most of which are not compatible with the Ethereum virtual machine .

The double liquidity model allows the operation of bridges such as the Terra Network with Ethereum.

In this way, by different methods, these bridges permanently block liquidity on both sides . Cross chain bridge development For example, in the hypothetical case of wanting to send UST from Terra to BSC, we should check that the bridge we are going to use is liquid in UST on the BSC network. In this way, we connect our wallet to the bridge and send our UST from Terra to the bridge and these are “locked” on the Terra side . While on the other side, in BSC, the same amount of UST is released, from this network, to the address that we have specified.

It is very important, before interacting with this type of bridge, especially when they are unofficial, to check that there is liquidity of the token that we want to send in the receiving network. As evidenced by this explanation, this solution, beyond being simpler, requires more attention from the user .

Blockchain bridges with specific standards

This subtitle catapults us to the explanation of one of my favorite bridges, which took 5 years of work, but with its operation devoid of complications for the user, makes each of those years worthwhile.

To achieve this simplicity in laying bridges, Cosmos took advantage of the use, by all of its own networks, of the same consensus called Tender mint . On the other hand, they created a type of standard, which must be supported by all networks that want to connect via IBC, specific to this shipment, known as ICS-20.