Any person venturing into web3 and defi will have to rely on a multitude of tools, depending on the goals they might be looking to achieve. In this article we’ll be explaining the concept of Bridges in defi, we’re showing you the DeCommas Bridges overview and we’ll teach you how you can use it to your advantage.
How do Bridges work?
Bridges in defi enable the seamless transfer of assets and liquidity between different blockchain networks, allowing users to access a wider range of defi protocols and applications. Essentially, a bridge is a protocol that connects two different blockchain ecosystems, enabling the transfer of assets across them.
This process involves locking up the original asset on one blockchain and issuing a representation of it on the other blockchain. The user can then use the representation of the asset on the target blockchain to participate in defi protocols or applications. This process is reversible, and the asset can be redeemed back to the original blockchain by burning the representation on the target blockchain.
Bridges in defi play a critical role in promoting interoperability and expanding the reach of defi protocols, which ultimately leads to greater adoption and innovation in the ecosystem.
Using bridges in 8 simple steps
- Choose a bridge protocol that supports the blockchains you want to transfer assets between. We’ll try Stargate. Click on “Bridge”.
- Connect your wallet to the bridge protocol.
- Choose the assets you want to transfer and specify the amount. We’ll send 50 USDC from Matic to the Fantom network.
- Approve the transfer by signing a transaction. Check if you have enough assets to pay for this transfer.
- Wait for the transfer confirmation.
- Now you can use your transferred assets on the target blockchain.
- To check the transfer, click on “View transaction” on LayerZero Scan.
- When done, you will have such an image.
- To move your assets back, use the same bridge protocol to redeem them by burning the representation on the target blockchain.
- Well done! Move to your next steps in defi experience!
Using bridges in defi allows you to access a wider range of defi protocols and applications, transferring assets between blockchains is a straightforward process.
As another example, we’ve already posted about it in the “How to Bridge Funds Into the Optimism Network” article, click here for more information.
Bridges available via DeCommas
DeCommas is working hard each and every day to make defi accessible for the masses by creating user-friendly interfaces that allow for seamless cross-chain interactions. One of the features we have to support this ambition is a comprehensible and easy-to-use interface for users to find the right bridge for their needs, as well as identify bridges with or without their own token. Currently, we’re supporting the bridges, from this list.
Defi bridges enable the transfer of digital assets between different blockchains. Those that use tokens require the user to send the asset they want to transfer to a smart contract, which generates a bridge token that can be sent to the target blockchain. The user then exchanges the token for the original asset on the target blockchain.
In contrast, bridges that don’t use tokens work similarly but wrap the original asset in a new form that can be used on the target blockchain, like BETH on BSC. This allows users to transfer their assets on bridges without creating a separate token.
The process for any bridge typically involves a few key steps:
- Locking up the original asset: The user initiates the transfer by sending the digital asset they want to bridge to a smart contract on the original blockchain. This smart contract locks up the asset and generates an equivalent amount of a bridge token.
- Confirmation of the transaction: Once the transaction is confirmed on the original blockchain, the bridge token is minted and sent to the user’s wallet.
- Transfer of the bridge token: The user can then send the bridge token to the corresponding smart contract on the target blockchain.
- Unlocking the target asset: Once the bridge token is confirmed on the target blockchain, the smart contract unlocks the original asset, and the user receives the equivalent amount of the asset on the target blockchain.
Using DeCommas’ “Has Token” feature to your advantage
The primary benefit for users is the ability to participate in retrodrops, a reward mechanism offered by many protocols to incentivize early adoption. Utilizing different bridges can provide users with access to future retrodrops. Several prominent projects, such as Optimism, Hop, Across, Hyphen, Synapse and Stargate, have previously offered retrodrops in the form of tokens and NFTs to their users. To aid in the decision-making process, DeCommas provides information regarding whether a given bridge utilizes a token or not within our Bridges tab. This information enables users to select bridges that offer the potential for retrodrops and maximize their benefits.
The Bridges feature is a great tool for anyone looking to streamline their defi experience. DeCommas is on a mission to provide our users with a seamless and hassle-free defi experience.
Stay tuned for more developments! The DeCommas team is already hard at work integrating the latest LI.FI technology with some of the most popular bridges in the space, including Connext, Hop, Celer cBridge, Optimism Gateway, AVAX Bridge, Across, Hyphen, Omni Bridge, Gnosis Bridge, Multichain, and Stargate. With these enhancements, you can expect even faster speeds, lower fees, making for a better defi experience overall.
Stay tuned for upcoming updates about our Bridges feature on Twitter and Discord.