The federated bridge works in a similar way to a private or enterprise blockchain. If a node wants to become part of the control network, it must meet a number of strict criteria. Only in this case will he be able to control the movement of tokens.
The trustless bridge works like a complete decentralized system. Any user can join it, who will then be motivated to perform the functions of a network agent – to check the correctness and reliability of transactions.
Types of bridges
Bridges can be unidirectional (move tokens only from one network to another), or bidirectional (move tokens in both directions). The mechanics of how bridges work can be very different depending on what kinds of smart contracts both networks support.
In most cases, bridge operators are network validators. They accept the tokens of your project in Ethereum for a special smart contract, and after making sure they are received, they issue the corresponding amount of tokens in your blockchain and vice versa.
Solving developers’ problems
dApps developers using Ethereum often run into the problem of a poor user interface owing to slow transaction processing rates and expensive gas charges during periods of high traffic and congestion. Using the bridge, they can send their token to another blockchain for processing at a higher speed and lower cost. This means that the developer can continue to run their dApps on Ethereum using the ERC-20 token standards and with the help of the active Ethereum developer and user community.
Mutual benefits for blockchain ecosystems
Both blockchain ecosystems benefit from developers using the blockchain technology bridge. It reduces network traffic on Ethereum by distributing it across other, less congested blockchains, thereby contributing to the current scalability challenges of Ethereum. Another blockchain accesses and accepts the Ethereum community.
Instant payments and settlements
Use cases for blockchain bridges could include instant payments at the point of sale, which until now has been nearly impossible given the scalability issues of Bitcoin and Ethereum. Bridges can also prove useful for dApps that need instant computation for a seamless user experience such as casino games.
Bridge is an application that allows you to move digital assets between different blockchains. How does it work? This is a program that keeps a wallet in one blockchain, and a smart contract in another blockchain, and vice versa, depending on which bridge it is. A wallet can be located in one blockchain, and a wallet can be located in another blockchain, but there cannot be a smart contract in one blockchain, and a smart contract in another. What is the difference? Bridge helps move assets from one blockchain to another. This is not some kind of magic.
The scheme works as follows: you send, for example, Ethereum to a bridge to release your Ethereum based on the Solana blockchain. To do this, you need to send Ethereum to a wallet belonging to this Bridge (Ethereum-Solana). When you send tokens, you must indicate your address on the Solana blockchain, where you will be credited with Ethereum based on the Solana blockchain. The bridge validates you as the owner of the Ethereum that was sent from wallet A, and you are the owner of the address of the wallet based on the Solana blockchain, where the bridge was supposed to send you wrapped Ethereum.
In the meantime, your "real" Ethereum is in the wallet that belongs to the bridge. The bridge simply stores your Ethereum until you return to the Solana blockchain, to this bridge, and exchange wrapped Ethereum for “regular” Ethereum based on the Ethereum blockchain. Accordingly, you either transfer it from the Solana wallet and you are identified as the owner of this wallet, and they make sure that you own the "real" Ethereum, which you must send to the wallet from which you previously sent it, and you simply change the parameters. Or you send from a new wallet to Solana to the bridge and ask to send it to your Ethereum wallet. Simply put, you «get this for that».
You give your real asset on the blockchain where it was originally issued in exchange for a synthetic asset, but on a different blockchain to which you want to move your underlying asset. What is it for? In order to be able to be present on different blockchains. In order not to be dependent only on Ethereum. Ethereum has very high transaction prices and, accordingly, it is unprofitable for projects with millions of micro-transactions to operate on the Ethereum blockchain.
What options do they have for solving the problem? One option is to use Layer-2 solutions, but this one is tricky. There is another way – bridges. You can issue your token based on the blockchain that suits you best, or based on several blockchains. Also, the bridge model makes it possible to conquer new blockchains, releasing assets on them and expanding the audience. Therefore, there is a hype in the crypto world now – many projects create their own bridges.
Currently, Boosty Labs has four bridges in the works. Two of them are quite famous projects, and these bridges should be completed by mid-August, the other two – within a month or two. In theory, bridges can be created for NFT tokens. For example, CryptoPunks and Rare Pepe are fairly well-known, popular and expensive assets, but they could be moved to other blockchains (CryptoPunks was released on the Ethereum blockchain, Rare Pepe – on the Bitcoin blockchain). For this, special bridges can be developed.
The bridge technology can be of interest to all projects that have issued their own tokens. That is, these are projects with a history of at least six months, and they have their own tokens. Why are bridges so relevant now? Because a year ago, transactions on the Ethereum network cost a more or less adequate amount and users could easily switch to other blockchains – Solana, Polkadot, etc. – but there was no point in that. Now that Ethereum has risen in price, people are switching to other blockchains. Ethereum has lost its status of an "exclusive" blockchain, but it still has much value locked. Therefore, users face the need of simultaneously being present in two blockchains.
The volume of value in other blockchains also began to grow, so users began to switch to new blockchains because they are more convenient, and because money began to appear there. For this, crypto bridges appeared – a technology that allows you to conduct a crypto business on several blockchains at the same time.
The bridge can "lead" both to one blockchain, and to several. For example, we are now selling a bridge to one blockchain for $75,000, and we sell the connection of each new blockchain to the bridge for $35,000. There are no connection restrictions – the only difference is in the speed and complexity of connecting certain blockchains. The launch of the bridge takes us up to three months, the connection of each new blockchain takes a month or a month and a half.