What is a crypto bridge?
Key takeaways
- Crypto bridges allow different blockchain networks to communicate with one another and exchange assets and information.
- Crypto bridges circumvent the need to send funds through centralized exchanges in order to use different networks.
- With Phantom’s Cross-Chain Swapper, you can easily bridge your crypto assets between Ethereum, Polygon, and Solana without ever leaving your wallet.
Web3’s decentralized nature has led to the emergence of many distinct blockchains and applications. For example, you can use decentralized finance (DeFi) applications on Ethereum, trade NFTs on Solana, or explore Polygon’s rapidly growing ecosystem. However, these blockchains are independent of each other, i.e., they can’t talk to each other. That's where bridges come in. Just like you exchange money while traveling to different countries, blockchain bridges allow you to transfer assets across various blockchains. Crypto bridges are the key to a connected, decentralized future, where assets and data flow freely across different platforms.
In this article, we’ll explain what bridges are, how they work, and how you can get started.
What are crypto bridges?
Crypto bridges are essentially software protocols that enable communication and interaction between different blockchains. Think of it as similar to building a bridge between two islands so people can travel back and forth. Crypto bridges allow two different blockchain networks to share information and work together.
Crypto bridges work by establishing a connection between two different blockchain networks, allowing the transfer of assets and data between them. They do this by maintaining unified liquidity pools and unique resource balancing algorithms. These liquidity pools have native assets linked to all chains at the same time, allowing for efficient swaps.
With crypto bridges, you can directly transfer your assets cross-chain with a few clicks. This helps you avoid the traditional process of sending assets to a centralized exchange, trading them for another asset and then withdrawing the asset.
Crypto bridges, thus, eliminate any potential transaction delays and the need for trusting a centralized exchange. Further, since centralized exchanges typically charge a percentage of your assets to trade on them, you will also likely save on fees while using a decentralized bridge.
Accessing other blockchains and ecosystems
Crypto bridges provide a gateway to explore different blockchain ecosystems. This is especially useful when chains like Ethereum become congested due to high user activity. With bridges, you can simply move your assets to another network like Solana. By bridging your assets to Solana, you can take advantage of the lower transaction costs and faster transaction speeds. For instance, you can use decentralized apps (dapps), like Jupiter or Raydium on Solana instead of Ethereum after bridging your assets. This allows you to participate in DeFi activities, such as staking, liquidity provision, and trading, at a reduced cost compared to the Ethereum network.
Seamless bridging with Cross-Chain Swapper
With our new Cross-Chain Swapper, you can bridge tokens across Solana, Ethereum, and Polygon right in your Phantom wallet. Here’s everything to love:
Bridge with ease: Transfer tokens across chains without going to centralized exchanges or using complex bridges.
Get the best deal every time: With optimized performance features, you get the best bridge route every time. Choose “Best Return” or “Fastest” transfer based on your needs in the moment.
Stay informed: See estimated transaction time and cost, for every bridge option, so you always know the status of your funds.
Enjoy peace of mind: With our set of trusted providers, you can bridge with confidence and without worry.
Transact instantly with Refuel: Cross-Chain Swapper allows you to Refuel, so you can transact as soon as you bridge. A portion of your transfer will arrive on the destination chain as native tokens. No more getting stuck on a new chain without gas!
To learn more about Phantom’s Cross-Chain Swapper, read our blog post. Don't have Phantom? Download Phantom and try our Cross-Chain Swapper today.
Disclaimer: This guide is strictly for educational purposes only and doesn’t constitute financial or legal advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.
