What is an NFT Cross-Chain Bridge?
Bridges possess an imperative role in the blockchain industry, as they allow blockchains to exchange assets and information. However, you might have wondered about the functioning process of these bridges. This is a blog by ChainTechSource which gives you detailed information about NFT cross-chain bridges.
What are Blockchain Bridges and Why Do We Need Them?
A blockchain bridge is a system that permits users to transfer assets and data between different blockchain networks. For instance, Ethereum and Polkadot or Polygon and Avalanche.
Basically, independent blockchains cannot directly talk to one another, as they are similar to people who speak mutually unintelligible languages. Different networks use different consensus algorithms, smart contract architecture, address formats, and so forth.
Hence, it is not possible to take TRX and send it to an Ethereum address beginning with Ox. In the best case, it won’t permit you to carry the transaction, and in the worst case, you might lose funds.
To have an accurate technical term, a regular blockchain is a silo-a repository of data and assets that are only available to one group of users. As an example of data silos, traditional corporate databases can be considered. It had been a topic of discussion about how blockchain technology can eradicate the problem and enable a free flow of data-but now decentralized networks have become silos themselves.
From an End User’s Point of View
As long as you interact with just one blockchain, lack of interoperability is not a problem. In the past, most people only used just Bitcoin or Ethereum, and with the least chance probably Tron. But in this current year, we are experiencing an explosion of alternative chains such as Solana, BSC, Avalanche, Fantom, Cosmos, Polygon, and so on-and the issue of transferring assets between chains has come to the forefront.
These L1(level1) chains are not only just faster and cheaper than Ethereum, but also offer massive Defi earning opportunities, efficient decentralized exchanges(Such as Avalanche’s and Trader Joe), and exciting Play2earn games, such as Harmony One’s DeFi kingdoms.
When you decide to interact with these dApps, you will come across a problem, the crypto assets in your possession don’t work on the other chain. For example, if you have Ethereum and you want to interact with a dApp built on Solana, you will have to convert Ethereum to Solana on a centralized exchange like Coinbase or Binance and send the resulting tokens to your Solana wallet address.
Seasoned crypto holders are fine with this incompatibility between chains and they don’t have any problem with the inconvenience. It is like the case when you live in the country US and use the dollar, but certain business enterprises like Uber Eats or Walmart accept only Swiss francs. Nobody will be having the patience to tolerate such menace. And yet, in the crypto space, we simply accept that one chain doesn’t support the assets issued on another-unless, of course, there is a bridge linking the two.
From a dApp Project’s Point of View
As the author of a blockchain project, you want to attract as many people as possible in order to increase the TVL (total value locked) in the case of a DeFi dApp, the number of players (in the event of a game), and other metrics. Alternative blockchains, on the other hand, have fewer users and lesser liquidity than Ethereum. At the time of writing, Terra’s TVL (the second-largest chain by value as of January 2021) was 9 times lower than Ethereum’s, and Solan’s was 15 times lower.
Cross-chain bridges make it easier for consumers to transfer chains while still keeping their assets. A bridge acts as a conduit between two vessels, allowing liquidity to flow from one to the other, filling the buckets of individual dApps. As a result, integrating blockchain bridges is in the best interests of cryptocurrency developers.
How Does a Cross-Chain Bridge Work?
· The user sends Asset to an origin chain deposit address (e.g., Ethereum) and pays a bridging charge.
· Asset A is stored with a trusted custodian or a randomly selected validator in a smart contract (for trustless bridges) (which can be controlled by the bridge admins or not)
· On the target chain, an equivalent amount of Asset A1 is issued (e.g.Avalanche)
· Asset A1 is sent to the target chain’s user’s address (an Avalanche wallet).
If a user wants their original Asset A back, they must send Asset A1 to a certain address (where the tokens will be burned), and the smart contract or custodian will return the original Asset A to the user’s wallet.
In 2022, bridges were such a big topic that you might think they were a brand-new technology. Wanchain launched the bridging phase in late 2018, followed by Wrapped Bitcoin, or WBTC.
Bridging NFTs is difficult, especially when it comes to storage: a single NFT can be worth tens of thousands of dollars, so the lock-up or custody portion of the bridge must be safe.