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Let’s assume that you have Ethereum with you, but you wish to spend that within the Polygon blockchain. This is where you will come across the need to bridge tokens.
A blockchain bridge, or a cross-chain bridge, helps connect two different blockchains with each other. As a result, users are capable of sending cryptocurrencies from one blockchain to the other quite easily. Let’s get into it more and see how you can bridge tokens from one blockchain to another.
Why should you bridge tokens?
At the moment, blockchains are not capable of working together. This is one of the most fundamental problems associated with them.
In fact, each blockchain is covered by walls of its own. This often results in congestion and high transaction fees. A solution, however, is to bridge tokens allowing transfers to happen though a streamlined process.
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How do bridge tokens work?
Bridge tokens, or blockchain bridges are capable of doing a lot of cool work. For example, they are capable of sending data and converting smart contracts. However, the most common application of bridge tokens would be token transfer.
Ethereum and Bitcoin are two of the leading crypto networks that you can find out there. However, the protocols and rules of Ethereum and Bitcoin are completely different from each other.
You can overcome these differences and create a smooth communication channel through blockchain bridges. After creating a bridge, you can simply proceed with transferring tokens from Ethereum to Bitcoin and vice versa. This would also help you with purchasing Bitcoin tokens at a very low fee.
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If you have Ethereum tokens and wish to transfer a part of it into Bitcoin, the blockchain bridge you create would hold your Ethereum tokens. Then it will go ahead and create an equivalent amount of Bitcoin for you to use.
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It is important to keep in mind that none of the cryptocurrencies associated with this transaction would move anywhere. Instead, the amount of ETH that you transfer would be locked within a smart contract. In return, you will be getting an equivalent amount of BTC. If you wish to convert back into ETH, the BTC you had earlier or whatever the amount that you have as remaining would be burned. In return, an equivalent amount of ETH will go into your crypto wallet.
If you wish to follow the traditional method to convert tokens, you will have to withdraw them to your wallet and place the deposit again from a different exchange. This can consume a lot of time and fees. Therefore, bridging tokens helps overcome a lot of those roadblocks.
The difference between trustless and trust-based blockchain bridges
Centralization is one of the bottlenecks that you can find in bridge tokens. If you plan to convert your cryptocurrency into another, you will have to give up the control that you have over them.
In other words, you should hand over your crypto to another person and trust. This is the main reason why wrapped tokens exist. A perfect example for a wrapped token is wBTC. The main objective of a wrapped token is to take ETH from you and wrap that in the BTC contract. This would provide the wrapped token with functionality of BTC.
Trust-based bridges are economical and fast. If you are looking forward to transferring a large number of cryptocurrencies, it is the best option available to consider. However, the number of reliable services that you can use to get work done is quite small. You should not take any risk by using less-known brands as it can be very risky.
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You will also be able to find trustless bridges or decentralized blockchain bridges, which focus on making users feel safe at the time of transferring coins. However, these operate similar to the actual blockchain. The individual network pitching would validate transactions that take place.
In case you don’t want to deal with the risk of getting your cryptocurrencies to wrong hands, you may think about using a trustless bridge. However, decentralized bridges offer freelance services, hence require a payment in order to process the request.
How to choose the best bridge to bridge tokens?
There are multiple Blockchain bridges that you can use to bridge tokens. Here are some of the most popular Blockchain bridges out there.
AnySwap
AnySwap provides additional features to you at the time of transferring cryptocurrencies. You will need to connect your wallet for transferring crypto. Once you do it, you will be able to see all the coin balances you have. It is also possible for you to proceed with transferring the balances from one coin to another without any problems.
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cBridge
You can trust cBridge as it comes from Binance. This is a perfect example for a trustless bridge. It provides you the opportunity to interact with a large number of cryptocurrencies and blockchains. Before you get work done out of cBridge, you will need to connect your crypto wallet to it.
Binance Bridge
Binance Bridge is a decentralized bridge, which offers a variety of tradable cryptocurrencies. It is providing support to some of the most popular blockchains such as TRON, Solana, and Ethereum.
Final words
Decentralization is one of the biggest factors behind the popularity of blockchain technology. If you want to transfer your cryptocurrencies from one blockchain to another, you will need to use a blockchain bridge. They provide an ideal environment to have a normalized and innovative crypto economy.
Yes. Token Wrapping and Bridging allow a token to run on multiple blockchains.
There is something called cross-chain bridge like the Binance Bridge. In order to bridge from Ethereum (Eth) to Binance Coin (BNB), you may use Binance Bridge. The pattern is the same. Here, Binance Smart Chain (BSC) will be your destination blockchain; whereas, Ethereum will be your source blockchain. To do so, set up a BSC wallet on your MetaMask. Visit the Binance Birdge website. Select Eth as your source network. Connect to MetaMask wallet and specify the amount of Eth you want to bridge. In order to complete the transactions, follow the given instructions and confirmations. BNB is now available in your BSC wallet, representing the bridged value of your ETH.
Direct token transfers between networks, unfortunately, are not supported by MetaMask.
Bridging tokens is simply the process of transferring or relocating tokens from one network to another since MetaMask does not allow direct transfer of tokens.
Users primarily bridge tokens to take advantage of cross-chain features and services, connecting multiple dApps and enhancing the overall liquidity. Lastly, it is one of the few available ways when it comes to transferring tokens from one network to another.
Some popular tools for bridging tokens are Binance Bridge, Polygon Bridge, Portal Token Bridge, Celer, Multichain, etc.
Some costs that are involved in bridging tokens between blockchains are transactions fees, bridge fee (varies from bridge to bridge), exchange fees and then there are some network-specific costs which may come in miscellaneous costs.
The time taken for token bridging varies depending on what third party platform you are using. Moreover, some factors may also come into play here. They range from the protocols and standards of the bridge, the number of transactions being carried out on the network, token-specific requirements, etc.
Yes, there can be limitations. Some of these limitations include how compatible the token is with the network that you are bridging with, whether the token is available to bridged, etc.