Original compilation: Peng SUN, Foresight News
Original compilation: Peng SUN, Foresight News
Similar to the bridge used in the physical world to connect two physical locations, the cross-chain bridge in the encrypted world connects two blockchain ecosystems, facilitating communication between different blockchains through the transfer of information and assets. In the early stage of the blockchain, when the demand was greater than the supply, factors such as the impossible triangle problem of the public chain, capital drive, and the "continued revolution" attribute of the blockchain made it possible for multiple chains to coexist, and it was difficult for a certain blockchain to emerge The pattern of one family dominating and the lords competing for the title will continue. Then, in this case, different blockchains have their own advantages in terms of performance and ecology, and users and their economic needs scattered on different networks must be bridged through cross-chain bridges.
At present, there are already countless projects laying out the cross-chain bridge track, trying to seize market share in advance. Among the many projects, 12 projects including Stargate, Orbiter, Synapse, Bungee, Multichain, Lifi protocol, Rango, LayerZero, Connext, Relay, Hop Protocol and Router protocol are relatively hot. I will select 6 mainstream cross-chain bridges to briefly introduce their basic concepts, innovative features, data indicators, future development and token airdrops, and remind everyone to pay attention to the risks of cross-chain bridges.
1. Synapse Protocol (SYN)
Synapse is essentially a cross-chain liquidity protocol that allows users to bridge assets between different chains. In order to play a multi-chain narrative, users had better be familiar with different cross-chain bridges, and Synapse represents one of the user-friendly bridges. According to DefiLlama data, we note that Synapse currently has a total value locked (TVL) of $204 million, which ranks among the top ten in the entire ecosystem.
On Synapse, users can cross-chain back and forth on different chains such as Ethereum, Arbitrum, Avalanche, BNB Chain, Optimism and Polygon:
Synapse plans to launch its own blockchain: SynChain. Crypto critics on Twitter speculate based on price action and Discord interactions that the SynChain launch announcement will come around ETHDenver 2023.
Given the L2 narrative and the large number of unique wallets supporting Optimism and Arbitrum, we can deduce that Synapse hopes to position itself as the cheapest L2 rollup with a fully diluted valuation (FDV) of ~$350M.
It is important to note that the upcoming SynChain may have an airdrop to gain early adopters - although speculation, there are rumors that there may be a Synapse airdrop for holders.
With Synapse already approving one-sided staking in November, it wouldn't be surprising if Synapse joins the real-earnings narrative and finally starts sharing protocol profits. Just remember to do your own research on the project.
Finally, let's take a look at Synapse's data indicators:
Market cap: $247 million
Price: $2.3
Fully diluted valuation (FDV): $325 million
Total Value Locked (TVL): $204 million
2. Connext
Connext is an Ethereum Layer 2 interoperability protocol. It was previously called xPollinate, and its main function is to facilitate the transfer of assets across blockchains and Rollups.
Since launching in closed beta in early February, Connext has seen huge growth in February, with an average weekly transaction volume of $5.5 million and around 5,000 transactions per week.
Notably, Connext relies on AMMs to price liquidity on each chain. According to Twitter user pepes, the excess liquidity on Optimism and Arbitrum means that Connext users can get positive slippage when crossing chains. In layman's terms, Connext pays you ETH to cross-chain to Optimism and Arbitrum.
Connext is a fast and secure cross-chain bridge, which is ideal for ordinary crypto enthusiasts. It breaks it down by active liquidity, which basically means that Connext's routers provide liquidity to users on the target chain, which is then repaid by the protocol.
Connext effectively lends funds to waiting users, who are then repaid through the protocol — which affects the latency of transactions. Overall, Connext products are both innovative and promising.
Finally, we take a look at Connext's FebruaryData indicators, it can be judged that this is a monthly indicator:
Total Value Locked (TVL): $18.4 million
Total transaction volume: $17.4 million
Total cross-chains: 20, 221
3. RelayChain (RELAY)
Relay is a cross-chain bridge aggregator, mainly to solve the problem of fragmentation and lack of interoperability between different chains. Its core product is the cross-chain bridge, which aggregates the most effective cross-chain bridges for users; in order to motivate new users, Relay also sets up a lottery system for each use of the cross-chain bridge (up to $5,000 in bonuses). Relay aggregates the liquidity of 5 cross-chain bridges and acts as a price comparison website to find the cheapest, fastest and most liquid cross-chain bridge for users.
Currently, the Relay cross-chain bridge supports 15 blockchains. Relay also has a staking feature designed to provide liquidity to the protocol.
Relay is positioned as a long-term project, and its token unlocking model ensures short-to-medium-term support for the project from advisors. In simple terms, token unlocking is time-based: 10% for the first unlock (30 days), 15% for the second (60 days), and 25% every quarter thereafter. The team has cooperated with major companies in the Web3 field and was the first to support the first DEX on Avalanche.
Finally, we can look at the data indicators of RelayChain:
Total Value Locked (TVL): $77 million
Cross-chain value: $1.03 billion
Total Transactions: 50,988
Market cap: $4 million
Please note that the market cap of Relay is relatively small. If you decide to buy this token, you must be very cautious, but it is best not to buy it, because the chances of its skyrocketing or plummeting are relatively high.
4. Stargate
Stargate is a LayerZero-based cross-chain liquidity protocol and the first DApp deployed using LayerZero. Compared with other cross-chain bridges, the main differentiating factor of Stargate is its implementation, which is said to be the first to solve the famous impossible triangle problem of cross-chain bridges first proposed by Vitalik.
While cross-chain bridges are usually forced to give up one element of the impossible triangle (instant transaction confirmation, native assets, and unified liquidity), Stargate does not sacrifice any of these properties.
Stargate also uses an innovative pool balancing algorithm that incentivizes users to deposit in under-deep pools (and withdraw from deep-deep pools). This ensures that liquidity remains deep on the chains supported by Stargate, providing users with a better cross-chain bridge experience with low slippage and price impact.
Stargate is backed by LayerZero, one of the best capitalized teams in the space. In fact, LayerZero was so well funded that they bought back all tokens and equity held by Alameda related to Stargate/LayerZero after the FTX event. As such, this eliminates the risk of a forced sale that many Alameda-backed projects face in asset recovery liquidation.
Finally, the Stargate data metrics look like this:
Market cap: $176 million
Fully diluted valuation (FDV): $1.065 billion
Total Value Locked (TVL): $480.1 million
Price-earnings ratio (P/E ratio): 490.93 x
5. Hop Protocol
Hop Protocol is a scalable universal token cross-chain bridge and DEX between Rollups, allowing users to transfer and send tokens from one Rollup or sidechain to another Rollup or sidechain without waiting for the challenge period of the network.
Hop Protocol is able to contribute to a multi-chain future by introducing market makers (or Bonders) to provide liquidity on target chains in exchange for a small fee. Bonder provides this credit guarantee in the form of hTokens, which are then exchanged for equivalent native tokens in the target chain's AMM.
hTokens were created to enable Hop Protocol to programmatically create and burn tokens for faster transfers between chains, as well as reduce native exit times for all scaling solutions, and to enable Bonder to be deployed and utilized more efficiently capital.
To ensure a safe cross-chain experience for users, Hop Protocol ensures on-chain guarantees that users will receive funds even in the rare event that Bonder goes offline. Adding on-chain guarantees ensures that the Hop cross-chain bridge cannot withdraw funds, but at the same time, there is a trade-off that if Bonder is offline, the user's cross-chain experience will be slower.
Due to its security model, Hop Protocol is able to compete with trustless bridges, which may need to pay higher interest to attract liquidity compared to trustless bridges such as Hop Protocol . Given this efficiency, trustless cross-chain bridges can offer lower fees than centralized cross-chain bridges.
As of March 1, 2023, the basic data indicators of Hop Protocol are as follows:
Market Cap: $13,135,651
Fully Diluted Valuation (FDV): $201,000,502
Total Value Locked (TVL): $79,733,768
6. Multichain (formerly Anyswap)
Multichain is a Web3 routing protocol using the SMPC network, supporting nearly 40 chains and more than 1,000 tokens.
Multichain consists of two parts: cross-chain bridge and cross-chain. Cross-chain bridges work similarly to other cross-chain bridges. When the assets on the source chain need to cross-chain to the target chain, the assets will be stored in the MPC smart contract on the source chain, and the target chain will cast and package the assets. Conversely, encapsulated assets need to be stored in smart contracts for destruction in exchange for assets on the source chain. On the other hand, cross-chain routing ensures that any asset can be transferred between multiple chains, whether it is a native asset or an encapsulated asset created with a Multichain cross-chain bridge.
The Multichain token is MULTI, which can be locked in exchange for veMULTI NFT. Holding NFT has the governance rights of the agreement, and can initiate proposals and votes. In addition to governance rights, NFT can also earn benefits.
As mentioned above, there are countless cross-chain bridges in the encryption market, but perhaps the most important question is "Which cross-chain bridge to choose in what occasion?" It depends on which chain you want to cross-chain your assets to.
Personally, I use Multichain a lot because it supports many chains and I don't have to think a lot. But I'm not sure if this is the best, because sometimes it takes longer to cross chain than other bridges. I have used Connext once, and its UI/UX and cross-chain speed are very satisfactory.
I also like to use the "Find My Bridge"This tool. You only need to enter the source chain and target chain, and "Find My Bridge" will search 55 cross-chain bridges to find the cheapest way.
Other than that, just try different cross-chain bridges and you will find the one you like best. Remember, be sure to enter their app via their official Twitter or CoinGecko. Do not google it as you may end up with a phishing site.
7. Risks of cross-chain bridges
The following risks related to the use of cross-chain bridges come fromEthereum official website, which has been explained perfectly enough without any other verbal embellishments.
Cross-chain bridges are in the early stages of development. The best cross-chain bridge design is likely yet to come. There are risks associated with interacting with any type of cross-chain bridge:
Smart contract risk—the risk of loss of user funds caused by code loopholes
Technical risk - software glitches, code bugs, human error, spam and malicious attacks that may interfere with user operations
In addition, because trusted cross-chain bridges increase trust assumptions, they have additional risks, such as:
Censorship risk — In theory, cross-chain bridge operators could prevent users from using cross-chain bridges to transfer assets
Escrow risk — cross-chain bridge operators can conspire to steal users’ funds
User funds are at risk if:
Vulnerabilities in smart contracts
user made a mistake
Underlying Blockchain Hacked
Cross-chain bridge operators trying to do evil on trusted bridges
Cross-chain bridge was hacked
Don’t think that there are no hackers in cross-chain bridges. BNB cross-chain bridges, Wormhole and Harmony cross-chain bridge vendors all have some large hackers, which can be found inrektOriginal link
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