Defiway: an introduction to crypto bridges

Currently, there are many blockchain networks, each with its characteristics. However, how do you combine all of these platforms to maximize the impact and build productive interactions between them? The answer is simple - you need to use crypto bridges. This innovative technology allows you to make cryptocurrency transactions through different blockchain networks without any problems.

Now, let's explain the mechanism and benefits with a simple example. Suppose you use only the BSC network to use some decentralized application. At the same time, you currently have only ETH in your possession. Before the advent of crypto-bridge, a user would need first to sell their Ethereum tokens for Binance Coin. Then, already use the Binance Coin in the BSC. Such a procedure is lengthy. In addition, you lose extra funds because of the commission. Thanks to crypto bridges, such transactions take place in seconds and do not require paying high commissions.

Defiway on the very first crypto-bridge and the way of development of this technology

As you already know, a crypto-bridge solves the problem of making a transaction from one blockchain network to another. In addition, this technology allows you to significantly expand the boundaries of each platform and solve all the associated problems in one go. This approach allows for the creating of new applications and dramatically expands the pool of tools.

The first crypto bridge can rightly be considered the "Bitcoin-Bitcoin Cash Bridge". It was launched in 2017. Since then, quite a few years have passed, and this industry has significantly expanded, and new blockchain networks with great opportunities have begun to appear. To make cryptocurrency transactions more convenient, it was also decided to develop crypto bridges. Greater availability, compatibility and flexibility are the signs of a quality crypto bridge. In addition, we should not forget that the future of the crypto industry is in its borderlessness.

Varieties of crypto bridges

Crypto-bridge is the only correct solution to help realize the full potential of all blockchain networks. It benefits developers, investors and ordinary users who are interested in the topic of cryptocurrencies.

Varieties of crypto bridges

So, before proceeding to a detailed analysis of the principles of crypto bridges, it is worth answering the question: what is bridging crypto? What types are there?

Let's analyze the four main types, each of which has its features that provide greater accessibility for users around the world:

- Token Bridge. Want to transfer your tokens between different blockchain networks? No problem, because that's precisely what this type is for. It is most common in decentralized exchanges because it provides users greater access to trading pairs.

- Smart Contract Bridge. The principle behind this bridge is that smart contracts are used to build a connection between different blockchain platforms. It is most commonly used in dApp because it provides easy access to new markets and protocols.

- Sidechain Bridge. It is a helpful technology because it allows different sidechains to be connected to the main blockchain networks. By doing so, users get access to faster transactions and low fees.

- Federated Bridge. This type specializes in the transfer of assets between blockchain networks. Its peculiarity is that it deals with blockchain platforms that are not directly connected. The central pillar of this bridge is trusted validators, which are the basis for the integrity of the network.

Defiway explains how crypto-bridge works

Let's understand in detail how such an innovative technology as crypto-bridge works.

  1. There is a source network and a destination network. Initially, the user deposits their assets into the wallet of the source network.
  2. These assets are blocked, and their "analog" is created in the destination network.
  3. The user withdraws the wrapped tokens to the network where he wants to receive his assets. At the same time, he can use them in the same way as the original assets.
  4. To get back their original assets, the user deposits the wrapped ones into the bridge wallet of the destination network
  5. The bridge destroys the wrapped tokens, and the original tokens appear in the source network.

This is only a generalized principle of crypto-bridge operation. It is not uncommon for vendors to add their features. For example, they add transaction validation and verification processes to enhance user security. The specifics of each such technology depend only on the developer, but its primary functions are unchanged - increasing liquidity and integrity of the cryptocurrency ecosystem.

Crypto Bridge from Defiway - the best solution for cryptocurrency lovers

With the principles of operation and history, everything is clear. However, what are the advantages of crypto bridge technology? The main benefits are increased liquidity, lower commissions, high user availability, no central control and tremendous speed.

Crypto bridges help to develop new trading strategies as the overall liquidity of the cryptocurrency market is increased by providing access to a broader range of assets. In addition, this technology allows for lower fees, higher speeds, and a wider pool of blockchain networks. Defiway is undoubtedly the leader here, where the commission is only 0.2%, and the rate of transactions is at the maximum level.

Is crypto-bridge safe? Answer from Defiway

Yes, of course it is. Defiway takes the security of users and their transactions seriously. This is because Defiway uses the latest security protocols, advanced encryption and multi-signature wallets, and regular transaction checks. But, if you are using a crypto bridge from another company, make sure to follow a few rules:

  1. Research the crypto bridge's reputation.
  2. Use multisig wallets.
  3. Don't forget about two-factor authentication.
  4. If at all possible, use a hardware wallet.
  5. Keep track of your assets.

In conclusion

Crypto bridges are playing an essential role in the blockchain ecosystem. They expand the possible platforms to work on and remove the boundaries between them. This contributes to the emergence of new practical tools and technologies. If you are interested in cryptocurrency, we advise you to visit the Defiway website and blog, where you will find many valuable and interesting articles on this topic.