In the past few years, we’ve seen an explosion of L1 chains and L2 solutions. As the blockchain ecosystem grows, interoperability between chains has become a necessity for scaling Web3 and enabling dapps to go cross-chain.

Blockchain bridges are critical tools in this space, allowing assets and data to move seamlessly between chains.

In this article, we will explore what blockchain bridges are, the challenges of cross-chain interoperability, bridge aggregation, and more.

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What are bridges?

There are fundamental differences in how blockchains are designed and operate. Each blockchain is an isolated system with unique characteristics, including architectures, standards, and protocols, making seamless communication and interaction between chains complex. Unlike the internet, which operates on standard protocols like HTTP and TCP/IP, blockchains lack a universally accepted protocol for cross-chain communication.

Blockchain bridges are protocols that enable interoperability between different blockchain networks. They facilitate the transfer of tokens or data from one chain to another, allowing developers and users to interact across what are otherwise siloed ecosystems. This has become a necessity in a world where users, assets, and liquidity are split across dozens of chains.

For example, a user holding ETH on Ethereum might want to use it on Avalanche. A bridge can lock the ETH on Ethereum and mint an equivalent token on Avalanche (e.g. WETH). This process enables cross-chain functionality.

There are three primary types of bridges:

1. Token Bridges: Focus on transferring tokens and assets between blockchains.
2. Data Bridges: Enable the exchange of information, such as smart contract calls or governance decisions, across chains.
3. Native Bridges: First-party bridges that facilitate both token and data transfers.

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The challenges

While bridges enable interoperability between chains, helping facilitate cross-chain transfers and swaps, there are still many challenges.

There are over 100 bridges across EVM and non-EVM chains, each utilizing a different design and architecture to meet differing needs. Users must navigate all of these bridges in order to interact across chains, a time-consuming and headache-inducing process, while developers face serious engineering overhead in choosing and integrating bridges into their apps.

On top of that, bridges feature a wide range security models - bridges must choose to optimize for speed, cost, or security, and face tradeoffs when it comes to trust and extensibility. As a result, bridges have led to numerous high profile exploits.

1. Security risks: Bridges are frequent targets for attacks due to their complex architecture and role in holding locked assets. Exploits, such as smart contract vulnerabilities or compromised validators, can result in significant losses.
2. Liquidity fragmentation: Each bridge typically requires its own liquidity pool, with liquidity fragmented across various standards and bridge specific liquidity pools on different chains.
3. Poor user experience: Many bridges are complex to use, requiring users to understand different blockchain ecosystems and bridging processes. Users must also manually discover and choose between a myriad of bridging options.
4. Engineering overhead: Bridges feature varying designs and architectures. This lack of standardization complicates integration for developers building cross-chain dapps.There are dozens of bridges for developers to choose from when looking for a bridging solution and integrating all of them isn’t feasible.

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Bridge aggregation

The need for Web3 apps to go cross-chain in order to tap into wider user bases and access different liquidity sources is clear. Having users leave an app and use a third-party bridge is a non-starter - it creates additional friction and reduces conversion. And on top of simply transferring assets cross-chain, users need to be connected directly to DEXs in order to execute swaps, one of the primary use cases of DeFi.

As the number of chains and bridges continues to grow, developers need solutions for easily integrating cross-chain transfers AND swaps into their apps.

Bridge aggregators solve this problem by connecting bridge-specific liquidity sources and enabling developers to offer a variety of bridging options to users with a single API. Instead of relying on a single bridge to transfer assets or data, bridge aggregators provide a meta-layer that enables developers to tap into a number of bridges.

Bridge aggregators function similarly to decentralized exchange (DEX) aggregators like 0x, which find the best trade routes by aggregating a number of DEXs. Along with aggregating a number of bridges and liquidity sources, aggregators analyze factors like liquidity, fees, speed, and security to provide an optimal cross-chain experience.

Bridge aggregators significantly reduce the engineering resources, including research, integration, and maintenance overhead, required for building a robust bridging solution from scratch.

All of this provides a number of benefits to developers and users alike:

1. Increased Liquidity: By combining the liquidity of multiple bridges, aggregation reduces slippage and makes cross-chain transactions more efficient, even for large transfers.
2. Improved user experience: Aggregators simplify the bridging process by offering a unified interface. Users don’t need to research or interact with multiple bridges—they can rely on the aggregator to handle the complexity.
3. Smart routing: Aggregators identify the cheapest route for cross-chain transactions, reducing fees and ensuring users get the most value from their transfers.
4. Easy integration for developers: Developers can integrate a single bridge aggregator API or SDK instead of working with multiple bridge protocols, saving time and effort. This simplifies building cross-chain functionality into Web3 applications.

As the ecosystem continues to grow, bridge aggregation will play a vital role in achieving interoperability between chains, enabling Web3 developers to offer seamless cross-chain functionality in their apps.

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Serious swaps

0x v2 makes it easy for developers to embed swaps in their onchain apps, unlocking new social experiences and monetization strategies.

Built to meet the needs of growing Web3 businesses, 0x v2 offers the most seamless swap experience with the best all-in prices, powerful new monetization controls, and enhanced security baked in at the ground level.

‍Sign-up for a free account on the 0x Dashboard to get started.

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