What are cross-chain bridges?

Amanda Jackson Cross-chain bridges are software applications that enable transactions to occur between various blockchains. If someone wants to transfer cryptocurrency, non-fungible tokens (NFTs), or other digital assets between blockchain networks, cross-chain bridges are an essential part of the process.

What is the market size of the Cross-Chain Bridge market?

The market is currently dominated mostly by Layer 2 scale-out cross-chain bridges, which are mainly built on Ethereum for better interconnection and interoperability. According to Footprint, the TVL of cross-chain bridges was $16.2 billion as of Oct. 26, which is an increase of over 72.25% in the last 30 days.

What are blockchain bridges and how do they work?

Bridges connect different blockchains or a layer one blockchain, such as Ethereum, to its side chains or layer two networks, allowing users to move digital assets from one chain to another. Scalability: Highly performant bridges can help mitigate the scalability of the host chain (e.g. Ethereum) without losing liquidity and network effects.

What assets are traded on cross-chain bridges?

The main asset traded on cross-chain bridges is ETH (WETH), with total ETH lock-ups on the 15 cross-chain bridges valued at $6.882 billion as of Oct. 26. This represents approximately 42.6% of total lock-ups and the most used asset by investors, followed by WBTC and stablecoin USDC. What Problems Do Cross-Chain Bridges Address?