Bridges: moving between networks
Lesson 15 of 58 in the course “Crypto”. Free, with animations and a quiz.
The coin doesn’t travel, it’s reissued
Networks cannot see each other: Ethereum has no idea what is going on in Solana. A bridge solves this: on network A it locks or burns your coin, and on network B it issues an equal one. USDC has an official mechanism, Circle CCTP: the coin is burned on one side and real USDC is issued on the other. For other coins you often get a wrapped copy, and its value holds only while the bridge is intact. So a bridge is not just a button; it is a place where other people’s money sits.
Three ways to cross
The first is the network’s own official bridge, such as bridge.arbitrum.io or the Base bridge. It is the safest, but withdrawing from an optimistic L2 back to Ethereum takes about 7 days. The second is fast bridges such as Across, Relay or Stargate: minutes and a small fee, but now you trust them as well. The third, and the simplest for a beginner, is an exchange: deposit on one network and withdraw on another. The key is that the exchange supports both networks for that coin.
Why bridges get hacked
Bridges pile up huge sums, so they are hackers’ favorite target. In March 2022 about $624 million was taken from the Ronin bridge used by Axie Infinity players: the attackers got hold of 5 of the 9 validator keys. Wormhole lost about $326 million, Nomad about $190 million. The takeaway is simple: do not leave money “in transit” longer than needed, and use bridges with a long track record and audits.
Bridging without losses
Four rules. Take the bridge link from the network’s official docs and bookmark it: phishing copies of bridges show up in ads all the time. Run a test of a couple of dollars first. Check what you will receive on the other side: on Arbitrum, for example, there is native USDC and the older bridged USDC.e, and they are different coins. And remember gas on the new network: many bridges have an option to add a bit of ETH for fees.
Check yourself
- Why are bridges hackers’ favorite target?
Correct answer: They pile up huge sums of other people’s money. The more money locked in one place, the more it pays to break in. Ronin lost about $624 million. - You need to move 200 USDT from Tron to Arbitrum quickly and simply. The easiest route for a beginner?
Correct answer: Deposit to an exchange on Tron and withdraw on Arbitrum. Here the exchange acts as a bridge if it supports both networks. A direct transfer from Tron to a 0x address won’t arrive, and ads are a favorite phishing spot. - After bridging, USDC.e arrived on Arbitrum, but the app asks for USDC. What happened?
Correct answer: It is the bridged version, not native USDC; you can swap them. USDC.e and USDC are different tokens of the same value. Check what you’ll get before bridging, or swap later on a DEX.