Top 5 Cross-Chain Bridges Every Airdrop Hunter Should Know

1. What is a cross-chain bridge?

Currently, the market features hundreds of cross-chain bridge solutions. Among these, there are official bridges developed by blockchain networks such as Arbitrum Bridge, Avalanche Bridge, and Optimism Gateway. Additionally, there are bridges developed by external organizations, including Celer cBridge, Stargate, and Synapse.

Cross-chain bridges facilitate the transfer of assets between different blockchain networks. They play a crucial role in decentralized finance (DeFi) by enabling interaction across blockchain networks, thus enhancing liquidity and flexibility for users engaged in DeFi applications.

However, the security of cross-chain bridges is a significant concern. Many DeFi hacking incidents have targeted these bridges, such as the attacks on Poly Network, Ronin (Axie Infinity), and Multichain. Recently, Multichain announced its cessation of operations following numerous security issues. The large volume of assets transferred through these bridges and potential vulnerabilities in smart contracts make them prime targets for hackers.

Given the direct impact on users' assets, security is of paramount importance. Therefore, selecting a secure cross-chain bridge is a critical consideration for many users. This article will review the basic operational models of cross-chain bridges and provide an overview of some of the most secure cross-chain bridge options available to users.

2. Operational Models of Cross-Chain Bridges

Cross-chain bridges are crucial for the advancement of decentralized finance (DeFi) and have developed various operational models over time. Below are some prevalent models of cross-chain bridge operations:

Lock & Mint: In this model, the bridge locks assets on the source blockchain and mints representative tokens (wrapped tokens) on the destination blockchain. Examples include the Polygon PoS bridge, Avalanche Bridge (AB), wrapped BTC, and wMonero.

Burn & Mint: In this approach, the asset is burned on the source blockchain through the bridge and subsequently minted on the destination blockchain. Examples include Hop, Across, and Circle CCTP.

Atomic Swaps: This model involves swapping the asset on the source blockchain for an asset on the destination blockchain. This method is generally more trusted and preferred as it relies on smart contracts to execute transactions automatically, thus eliminating the need for a third party, unlike the lock & mint or burn & mint models. Examples include cBridge and Connext.

3. Top 5 Effective Cross-Chain Bridges

According to data from Defillama, based on daily trading volume and transaction count, Bigcoin has identified the top five cross-chain bridges: Stargate, Across, Synapse, Allbridge, and Hop Protocol.

3.1. Stargate

Stargate is a cross-chain bridge solution that leverages LayerZero's Omnichain technology, currently holding the largest market share among bridges.

Advantages:

Security: Stargate's Omnichain solution, which uses LayerZero, is highly regarded for its security. It eliminates intermediary tokens and reduces the risk of unauthorized token minting seen in the Lock & Mint model.
Total Value Locked (TVL): Stargate Finance operates across eight EVM chains with a current TVL exceeding $300 million. Upon its launch, the protocol achieved a TVL of $4 billion, showcasing its strong appeal to investors.
Low Transaction Fees: Each non-STG transfer through Stargate incurs a 0.06% fee.

Disadvantages:

Additional Fees: Transactions on Stargate include a "Gas cost" fee in addition to the regular "Gas fee." This fee is variable and currently lacks transparency regarding its allocation.
No Token Swapping: Users can only transfer assets between different networks without the ability to swap tokens within the same network on Stargate.

3.2. Across Protocol

Across Protocol is a cross-chain bridge designed for transferring assets between Layer 2 blockchains and Ethereum.

Advantages:

Speed: The Relayer Fee mechanism incentivizes Relayers to quickly forward assets, resulting in faster bridge transactions, typically completing in 2-3 minutes.
High Security: Across employs UMA's Optimistic Oracle (OO) mechanism, making the protocol decentralized and resistant to attacks. The Data Verification Mechanism (DVM) ensures accurate data provision for smart contracts.
No Slippage: Across Protocol supports zero slippage transactions, optimizing for large-volume trades.

Disadvantages:

Limited Token Pairing: Currently, Across Protocol only supports the transfer of a single token between different blockchain networks, unlike other bridges that support two tokens.
Limited Blockchain Support: Across Protocol supports only four blockchains: Ethereum, Polygon, Optimism, and Arbitrum.

3.3. Synapse

Synapse functions both as a cross-chain bridge for asset transfers between blockchains and as an infrastructure enabling dApps to build cross-chain interactions.

Advantages:

Gas Fee Airdrop: Users receive gas fee airdrops on the destination chain, ensuring zero slippage in transactions.
Security: Synapse utilizes validators and Multi-Party Computation (MPC) technology for transaction validation, enhancing security and network safety.
Profit Opportunities: Users providing liquidity to pools receive LP Tokens, which can be staked for additional returns.

Disadvantages:

Complex Intermediate Token System: The use of nToken as an intermediary token complicates the system and its management.
De-Peg Risk: Although backed by stablecoins and ETH, market volatility affecting either of the collateral tokens can impact the intermediary token and, consequently, the Synapse ecosystem.

3.4. Allbridge

Allbridge is a blockchain bridge built on Solana, supporting two main functions: swapping stablecoins and bridging tokens.

Advantages:

Single-Signature Method: Unlike most blockchain transactions requiring multiple validator confirmations, Allbridge aims for single-validator confirmation for transaction acceptance.
Low Fees and Fast Transactions: Built on Solana, Allbridge offers quick transactions with low fees.
User-Friendly: The interface is intuitive and easy to use, allowing users to select and send tokens across desired networks with ease.

Disadvantages:

Limited Blockchain Support: Allbridge does not support newer blockchains like zkEVM or zkRollups, restricting asset transfer to older blockchains.
Outdated Mechanism: Operating on a lock & mint model, Allbridge faces challenges in attracting new users compared to more modern cross-chain bridge solutions.

3.5. Hop Protocol

Hop Protocol is a cross-chain bridge enabling token transfers between Ethereum's Layer 2 networks using the Liquidity Network Bridge design. It employs an intermediary token, hToken, for asset transfers.

Advantages:

Rapid Asset Transfers: The intermediary token (cross-chain token) in Hop Protocol enhances the efficiency of current bridge operations.
Cross-Chain Asset Transfers: Hop Protocol supports assets like USDC, USDT, MATIC, ETH, and DAI across Arbitrum, Optimism, xDAI, Polygon, and Ethereum Mainnet.

Disadvantages:

Limited Network Coverage: Hop focuses primarily on Layer 2 networks, limiting its cross-chain bridge market share.
Low Liquidity: The highest TVL pool on Hop is $6 million, with returns insufficient to attract continuous liquidity provision.
Price Slippage: Operating on an AMM swap model (with a 0.04% transaction fee), Hop Protocol experiences significant slippage, making it unsuitable for large-volume trades

4. Conclusion

Based on current metrics, Stargate Finance is the most prominent cross-chain bridge, with a substantial monthly transaction volume of approximately $3 billion. Each cross-chain bridge has distinct advantages tailored to the specific networks and token types it supports. To prevent unnecessary losses while experimenting with cross-chain bridges, you may refer to "5 Tips for Using Cross-Chain Bridges Effectively" by Theblock101.

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