Tech

Everything you need to know about Blockchain Bridges

Suppose you live in India and travel to Singapore. In India we use Indian Rupees (INR) while in Singapore they use Singapore Dollars (SGD). So you could exchange some money from INR to SGD through a bank. Or you could use an international card that allows you to pay in Singapore in SGD. This is easy in the banking world, but much more difficult in the blockchain world.

Ethereum Mainnet and Terra are two independent blockchains. They have different rules and consensus mechanisms. Ethereum mainnet’s native token is ETH, while Terra’s is LUNA.

Now let’s say you have a lot of LUNA on Terra but want to use it on the Ethereum mainnet. How you do that?

This is where a blockchain bridge comes into play. You can use the Terra Bridge to buy Wrapped Luna (WLUNA), an ERC-20 token native to the Ethereum mainnet.

In simple terms, this is how a typical bridge works:

It receives some kind of crypto, for example LUNA. It locks this LUNA as collateral. It “mints” an equal amount of another cryptocurrency, like Wrapped LUNA, and publishes it on another blockchain, e.g. B. Ethereum Mainnet.

Trusted versus trusted bridges

A “Trusted Bridge” depends on a central entity and you lose control of your cryptos by using it.

A “Trustless Bridge”, on the other hand, works with Smart Contracts and you retain control of your cryptocurrencies.

The top ten bridges

The top bridges and their Total Value Locked (TVL) are:

WBTC (WBTC): USD 11.19 billion (approximately Rs. 86,067 billion)

Multichain (MULTI): US$5.07 billion (approximately Rs.38,995 billion)

Portal: US$4.18 billion (approximately Rs.32,149 billion)

hBTC (hBTC): $1.54 billion (approximately Rs. 11,844 cr.)

JustCryptos (JST): 1.2 billion US dollars (approx. 9,229 billion rupees)

Terra Bridge: US$1.08 billion (approximately Rs.8,305 billion)

RenVM (REN): US$928.46 million (approximately Rs.7,139 billion)

cBridge (CELR): US$749.69 million (approximately Rs.5,765 billion)

ChainPort: US$207.42 million (approximately Rs.1,595 billion)

Allbridge (ABR): US$207.25 million (approximately Rs.1,593 billion)

(Source: defillama.com)

hack bridges

Since bridges contain a lot of crypto assets, they are an attractive target for hackers. And because writing the code for bridges is insanely complex, hackers are having a great day looting them.

When a bridge is attacked, the hacker drains crypto from one side of the bridge, e.g. Wrapped LUNA, without depositing anything on the other side, e.g. LUNA.

One of the biggest crypto attacks happened in March 2022 when the Ronin Bridge built for Axie Infinity was hacked into ETH and USDC for $625 million (around Rs. 4,729 million).

Ronin worked “off-chain” – it was connected to the blockchain but existed on external servers that were not part of the blockchain. It relied on nine validator nodes, five of which were needed to validate transactions. The hackers exploited code vulnerabilities and also used social engineering.

Another major bridge hack targeted Wormhole, which supports six blockchains – Terra, Solana, Ethereum, Binance Smart Chain, Avalanche, and Polygon. The cost of the hack was US$322 million (approximately Rs.2,410 billion).


Rohas Nagpal is the author of the Future Money Playbook and Chief Blockchain Architect at the Wrapped Asset Project. He is also a retired amateur boxer and hacker. You can follow him on LinkedIn.



Cryptocurrency is an unregulated digital currency, not legal tender and is subject to market risks. The information provided in this article is not intended to and does not constitute financial advice, trading advice, or any other advice or recommendation of any kind offered or endorsed by NDTV. NDTV is not responsible for any loss arising from any investment made on an accepted recommendation, forecast or other information contained in this article.

https://gadgets360.com/cryptocurrency/opinion/what-are-blockchain-bridges-2951725 Everything you need to know about Blockchain Bridges

Ryan Sederquist

InternetCloning is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@internetcloning.com. The content will be deleted within 24 hours.

Related Articles

Back to top button