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What is a Cross-Chain Bridge? How Blockchains Connect and Interact
- A cross-chain bridge is infrastructure that enables interoperability among blockchain networks, facilitating the transfer of assets and data between chains.
- These bridges are crucial for connecting blockchains like Bitcoin and Ethereum, which use different rules and mechanisms, allowing them to communicate seamlessly.
- Cross-chain bridges make cross-chain interoperability possible, paving the way for faster, cheaper, and more flexible crypto systems.
- They enable cross-chain transfers between networks, reducing fees, speeding up transactions, and providing access to more liquidity.
- Apps can operate across multiple networks simultaneously thanks to cross-chain bridges, enhancing user experience and tapping into diverse user bases.
- Efficient movement of capital in DeFi is made possible by cross-chain bridges, supporting yield chasing, liquidity deployment, and strategy optimization.
- NFTs and blockchain games benefit from cross-chain interoperability, allowing players to transfer assets between ecosystems and access larger markets.
- Cross-chain bridges also facilitate cross-chain governance for DAOs, enabling users to participate in voting and decision-making processes across various blockchains.
- Bridges employ smart contracts, validators, relayers, and oracles to coordinate data and assets between blockchains that were not originally designed for interaction.
- Different bridge models exist, such as lock and mint, burn and mint, lock and unlock, programmable token bridges, federated bridges, and relay or notary bridges.
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