multichain ethereum binance smart chain binance

What types of blockchain bridges are there?īlockchain bridges can be categorized according to their functions, mechanisms, and levels of centralization. If you want to convert your funds back, you simply go through the reverse process. After the crypto is sent to the address during the time window, Binance Bridge will send you an equivalent amount of wrapped tokens on the other blockchain. You will then deposit the crypto to an address generated by Binance Bridge. To use the Binance Bridge, for example, you will first select the chain you’d like to bridge from and specify the amount. It’s pegged to the value of the asset it represents and typically can be redeemed for it (unwrapped) at any point.įrom a user’s perspective, this process takes a few steps. The amount of BTC you want to port gets locked in a smart contract, and the equivalent tokens on the destination blockchain network are issued or minted. A wrapped token is a tokenized version of another cryptocurrency. When you bridge 1 BTC to an Ethereum wallet, a blockchain bridge contract will lock your BTC and create an equivalent amount of Wrapped BTC (WBTC), which is an ERC20 token compatible with the Ethereum network. However, this would incur transaction fees and expose you to price volatility.Īlternatively, you can achieve this objective by using a blockchain bridge without selling your crypto. One way is to sell your BTC and then purchase ether (ETH). For example, you want to transfer your bitcoin ( BTC ) to the Ethereum network. The most common use case for a blockchain bridge is token transfer. In other words, blockchain bridges are a critical component of an interoperable future of the blockchain industry. They allow users to access new protocols on other chains and enable developers from different blockchain communities to collaborate. An interconnected network of blockchains can allow tokens and data to be exchanged between them smoothly.Īside from enabling cross-chain transfers, blockchain bridges provide other benefits. Blockchain bridges help break up these silos and bring the isolated crypto ecosystems together. Each blockchain has its own rules, tokens, protocols, and smart contracts. In the blockchain space, where there are many distinct protocols, blockchain bridges are essential to enabling a similar ease of exchanging data and value.Īs the blockchain space developed and expanded, one of the most significant limitations has been the lack of capacity of different blockchains to work together. Interoperability is the cornerstone of the internet: Machines worldwide use the same set of open protocols to talk to each other. Thus, blockchain bridges enable what is called interoperability, meaning that digital assets and data hosted on one blockchain can interact with another.

These protocols function like a physical bridge linking one island to another, with the islands being separate blockchain ecosystems. Bitcoin, Ethereum, and BNB Smart Chain are some of the major blockchain ecosystems, all relying on different consensus protocols, programming languages, and system rules.Ī blockchain bridge is a protocol connecting two economically and technologically separate blockchains to enable interactions between them. To understand what a blockchain bridge is, you need to first understand what a blockchain is. Blockchain bridges are fundamental to achieving interoperability within the blockchain space. If you own bitcoin but want to participate in DeFi activity on the Ethereum network, a blockchain bridge allows you to do that without selling your bitcoin. A blockchain bridge is a protocol connecting two blockchains to enable interactions between them.

Multichain ethereum binance smart chain binance