Blockchain bridges, the state change for your crypto assets
In the blockchain space, we constantly face various challenges:
In design
In systems
In security
In usability
And in general, challenges that have no precedent.
One of these challenges is the construction of bridges between different networks to facilitate the transfer of assets between chains and to connect liquidity, making systems that were previously isolated operable. In simple terms, think of these bridges as building a direct communication link between two cities, benefiting them through trade, tourism, and wealth generation. However, in the blockchain context, this bridge construction is more complex. Between these two cities, you might encounter wetlands, swamplands, protected areas, and dense vegetation that, in some places, are impenetrable. The purpose of the bridge is to create a stable and secure traffic connection between the two cities without disrupting the surrounding ecosystem. Finding this balance is where the challenge lies because once the bridge is built, it's often difficult or impossible, in some cases, to change its fundamental characteristics to prevent a catastrophe without collateral damage.
Thinking about the design process, making decisions about the design, establishing a reward system for reviewing the bridge's code, and working in a secure environment before its inauguration are all considered at least coherent decisions. This is because failure at any point in the process can put a significant amount of capital, reputation, and the future of the bridge at risk. Simulations not only provide security but also offer metrics that allow developers to create multiple scenarios based on those metrics, helping to make more informed and rigorously tested decisions to achieve desired objectives.
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With this phase completed, interpreting the objectives, accurately calculating probabilities, and properly grounding the business model become mandatory practices for anyone looking to build a bridge or develop any blockchain-based project. This is because these practices align well with traditional risk management models. Being able to simulate scenarios (good, bad, and regular) and applying real-time improvements to patch system failures is crucial for the viability of the bridge's operation. It allows for functional solutions to be established in response to unintended consequences, among other things.
In numbers, the volume of monthly transfers is growing at a double-digit rate. For example, the new blockchain, Base, has received $250 million in deposits from native bridges since its launch. This has indirectly led to the installation of many bridges on the Base network to meet this high demand.
In the blockchain world, when a new system is born, there's also an improvement. In this case, I'm talking about bridge aggregators, which provide the most efficient liquidity routes to connect your liquidity with the most high-performing bridges at that specific moment. By bridging blockchains in this capital transmission action, it reduces slippage when using bridges. This, in turn, allows users to retain a larger portion of their assets compared to using bridges with a single liquidity source. Additionally, it enhances the use of cross-chain messaging protocols, enabling DeFi loan protocols to secure an NFT on one chain as collateral and then obtain a loan based on that collateral on another chain.
Here's a link for you to continue researching about bridges. And remember, a bright future is only possible with bright individuals, where the blockchain is a sky full of shining stars.