Choosing the best Cross-Chain Bridge

In our last article, we covered the reason for the emergence of cross chain protocols and bridges due to the evolving Multichain landscape.
Cross chain bridges allow assets to be transferred across different blockchains despite their distinctive infrastructures.
In essence, a bridge is consisted of three main components: Chain A (ie. source chain), the middleman and Chain B (ie. destination chain). While source chain and destination are straight forward to understand, that is, where assets are originated and directed to, the more complicated part is the middleman where there are different variations of it, hence there are bridging protocols with different architectures that serve different needs.
Common Cross chain bridge Designs.
There are several ways to categorise bridges, such as the type of chains they connect and their trust models, but among them the most important is the design of the bridge, which is how they transfer assets from one chain to another.
The following models are two of the common Cross chain bridge designs:
1.Lock and Mint
Under the Lock and Mint mechanism, the user’s tokens will be locked by smart contract on source chain (chain A), at the same time wrapped tokens will be minted on the destination chain (chain B). When the user wants to bridge back to the source chain, the wrapped tokens on destination chain will be incinerated (they will be sent to a burn address), followed by the unlocking of the original tokens on source chain.
2.Burn and Mint
Similar to Lock and Mint, but instead of locking, tokens on source chain (chain A) are burnt while at the same time tokens on destination chain (chain B) are minted. However, there is a major difference with Lock and Mint bridges, which is that Burn and Mint is non-reversible. If the user wants to bridge back from chain B to chain A, they will have to go through another Burn and Mint process (ie. Burn tokens on chain B and mint tokens on chain A).

Drawbacks of Wrapped tokens

One advantage of using wrapped tokens is its availability for transfer of assets because it does not rely on liquidity. Instead, it uses smart contracts to mint wrapped tokens, hence these kind of bridges have higher scalability.
However there is a major drawback for using wrapped tokens when bridging assets, which is the smart contract risk. Wrapped token is essentially tokenised representation of a certain token, which means it derives its value from its underlying asset and it must be redeemable. The smart contract on source chain that holds the locked assets often become the target for hackers, and wrapped tokens will be worthless if the locked assets are compromised.This creates a vulnerable point of attack for malicious actors, causing exploits like the one that happened with Wormhole that cost over 321 million.

Alternative — Liquidity Pool Design

Apart from smart contract risks, there is also another limitation of using wrapped tokens, which is the inability of transferring native assets across chains.

What if we use native assets on both chains?
Under the liquidity pool design, the bridge owns native token pools on chain A and chain B. For instance, a user can deposit “chain A compatible USDC” to the pool on chain A, and then receive “chain B compatible USDC” from the pool on chain B.
With the elimination of wrapped tokens and custody of assets, the risk of redeemability is also removed.
The downside of this model lies in the requirement of assets in the liquidity pools. Using the same example above, if the pool on chain B is empty or has insufficient tokens, the tokens deposited to the pool on chain A will be stuck until the pool on chain B is replenished.

Examples of Bridges with different designs
1.Lock and Mint — Avalanche Bridge
The Avalanche Bridge connects Avalanche and Ethereum with a two step process: Step 1: Locking assets on AvalancheStep 2: Minting wrapped tokens on Ethereum
The minted wrapped tokens on Ethereum can be used within the Ethereum ecosystem. For instance, they can be traded on DEXs, or interact with other Dapps on Ethereum.
When users want to redeem their wrapped tokens and unlock their assets on Avalanche, they can initiate a redemption process, which involves burning the wrapped tokens on Ethereum and releasing the locked assets on Avalanche.

2.Burn and Mint — Circle’s Cross Chain Transfer Protocol (CCTP)

CCTP is a bridge for native USDC built by Circle, the issuer of USDC, it is now live on 7 blockchains: Arbitrum, Avalanche, Base, Ethereum, Noble, OP Mainnet, and Polygon PoS, and will also support Solana in the near future.
The CCTP utilises the Burn and Mint mechanism:Step 1: Burning native USDC on source chain (eg. Ethereum)Step 2: Minting same amount of native USDC on destination chain (eg. Arbitrum)
Reversely, when bridging back from Arbitrum to Ethereum, the same process is carried out the same way but in opposite direction.
Since both sides utilise native USDC, it eliminates the need for synthetic tokens hence reduces the associated security risks.
3.Liquidity Pool — MES Protocol
MES Protocol currently supports USDT, USDC, ETH pairs across four chains (Ethereum, Arbitrum, Optimism, zkSync).
MES Protocol utilises the Liquidity Pool mechanism, where it has pools of tokens on the chains it supports. For instance, users can bridge USDC on Ethereum to ETH on zkSync, giving users the flexibility of choosing between chains and different asset pairs and bridging them seamlessly in just a few clicks.
In terms of speed and cost, bridging assets using MES Protocol usually take under a minute with relatively low bridging fee.

Try it here: https://www.mesprotocol.com/
Choosing Cross chain bridge
Ultimately, choosing the best Cross chain bridge depends on a number of factors including:
•Nature of the transaction- Bridging amount- Which chains are you bridging to and from, L1 or L2- Time- Cost - Security
By considering these factors and aligning them with your specific requirements, you can make an informed decision and choose the best bridge for your needs.

Final Thoughts

Ultimately, the purpose of all Cross chain bridges is to connect different chains and hence enhancing economic activities and utilising capital. Looking forward, it is evident that there will be a growing demand for interoperability in the blockchain space.
While there are Multichains, there will also be multi bridges emerging to serve different needs. In the future, these chains and bridges may eventually form a spiderweb-like network with seamless asset transfers.
However, it is important to note that bridges are still in nascent stages of development. Over time, the technology behind these bridges should become more efficient, secure and sophisticated to meet the evolving demands of the ecosystem.
In addition, it will also need more robust security because as they grow larger and handle more transactions they will become more of a target for attackers.
Furthermore, as bridges become larger and handle a greater volume of transactions, the need for robust security measures becomes even more critical. The growing prominence of bridges makes them potential targets for attackers, meaning that enhanced security is required to safeguard asset transfers.
MES ProtocolMultichain Exchange Solution.
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