Why do people bridge crypto assets?

People bridge assets to move value between different blockchains so they can access specific DeFi protocols, join new farming pools, or consolidate liquidity.

What are the main risks of bridging?

Bridges are frequent targets for major hacks and exploits. The process is also confusing, requiring management of multiple gas fees and contract approvals that increase the chance of costly user errors.

How can I find the cheapest way to bridge assets?

You can use bridge aggregators like Bungee or Jumper to compare routes and find the cheapest or fastest options. For common stablecoins, using a native bridge like CCTP or a centralized exchange often yields the lowest fees.

Are there alternatives to traditional bridges?

Newer models like data availability layers and intent-based systems are emerging. These aim to improve security and reduce reliance on traditional lock-and-mint bridge designs.

Why Bridging Crypto Assets Is Risky and Expensive

Bridging assets is necessary for moving value between blockchains like Ethereum and Solana to access different protocols and farming pools. Users rely on it to consolidate liquidity spread across multiple networks.

However, the process is plagued by security vulnerabilities and massive financial losses from hacks. The user experience is also confusing, requiring multiple gas fees and token mapping approvals.

Transfer costs vary wildly between platforms, with fee quotes for the same transaction sometimes differing by over $200. To navigate this, users turn to aggregators like Bungee and Jumper, or use native bridges and centralized exchanges for stablecoin transfers.

Why Bridging Crypto Assets Is Risky and Expensive — infographic

Users acknowledge that bridging assets in DeFi is essential for moving value across different blockchains, but it comes with significant risks and complexities. While bridges are critical for liquidity and cross-chain functionality, their current implementation often involves high fees, security vulnerabilities, and a confusing user experience.

Bridging Uses

Enabling cross-chain transfers: Bridging allows assets and data to move between various blockchain ecosystems like Ethereum, Solana, and Polygon, which is necessary to access different DeFi protocols and opportunities. "Cross-chain solutions are trying to solve this by allowing assets and data to move between ecosystems like Ethereum, Solana, BNB Chain, Polygon, and others."

Accessing diverse farming pools and opportunities: Users use bridges to transfer stablecoins or other assets to different chains to participate in farming pools or leverage specific DeFi applications. "tried to move USDT from Ethereum to Solana last week to get into a new farming pool."

Aggregating liquidity: Bridges help address the fragmentation of liquidity across multiple blockchains, enabling users to consolidate holdings or optimize their DeFi strategies. "One of the biggest issues in crypto is liquidity and users being spread across multiple blockchains."

Challenges and Risks

Security vulnerabilities and exploits: Bridges are frequently targeted, leading to significant financial losses due to hacks and exploits, making them a major security concern in DeFi. "$770 million stolen in defi this year. 40+ protocols shut down. bridges are the common denominator and nobody is fixing the actual problem."

Complex user experience: The process of bridging can be confusing, requiring users to manage gas fees on multiple chains, approve contracts, and understand token mapping, increasing the risk of errors. "the whole process felt way riskier than it needed to be for a routine move."

Varying costs and fees: The fees for bridging can differ significantly between protocols and asset types, making it challenging to find the most cost-effective solution. "the quotes between bridges were all over the place. Best gave me $9,940 on a $10k transfer, worst gave me $9,720. That's $220 difference just from picking the wrong bridge for a stablecoin transfer"

Solutions and Alternatives

Bridge aggregators: Tools like Jumper and Bungee aggregate multiple bridges, allowing users to find the cheapest or fastest routes for their cross-chain transfers. "bungee.exchange is pretty good for bridging."

Native bridges and CEXs for stablecoins: For common stablecoins like USDC, native bridges or centralized exchanges (CEXs) are often recommended for their lower fees and direct transfers. "Seriously? Why don't you use the native CCTP bridge? 1:1 and low fees."

Newer interoperability models: Data availability layers and intent-based systems are emerging as potential alternatives to traditional lock-and-mint bridges, aiming to reduce the attack surface and improve security without relying on trusted intermediaries. "DA layers like avail, celestia, eigenda are live and production ready. the tech isn't theoretical anymore."

Does this align with your understanding of bridging assets and their uses?

Best for: DeFi users who need to move assets between blockchains to access specific protocols or farming opportunities.