As cryptocurrency protocols have evolved over time, differences in how they build and validate blocks have left us with a wide and varied universe of incompatible networks. This makes it difficult for crypto traders who want to chase opportunities to profit, regardless of the chain they’re on. 

Blockchain bridges make it possible to move assets between selected crypto networks, opening up new possibilities, but they often come at a cost to the user experience. While you can swap tokens on the same chain almost instantly and without fees using Matcha, bridging is notoriously slow and, depending on the bridge you choose, can be extremely costly. 

Why bridges exist 

Decentralized cryptocurrency networks use blockchains - distributed ledgers - to record all transactions in a way that they can’t be reversed or changed after the fact. This immutability is fundamental to the security of the network and, combined with other factors like a limited supply of tokens, is what allows the tokens to establish a monetary value. 

Since each blockchain builds its blockchain in slightly different ways, with different parameters for block time, block size, checking consensus and so forth, as well as different software clients for interpreting the data, it is all but impossible to establish compatibility between two separate chains. 

Swap crypto across networks with Matcha!

Crypto bridges, despite the name, do not actually move an asset from one network to another. Rather, they will freeze a certain amount of tokens on the source chain and then synthesize the same amount at the destination by issuing a copy of the asset on the new chain.

Typically, moving your assets to a new chain involves multiple steps:

1. Swap for a compatible token, such as wrapped ether (WETH) using a DEX.
2. Bridge your WETH using a bridge platform.
3. Wait for your WETH to be issued on a new chain.
4. Swap your WETH for the token you want using another DEX.

This process is achieved using bridging smart contracts, which programmatically lock up tokens so they are no longer spendable, and then use proof of the locked tokens to allow new tokens to be issued on another chain. If the tokens are later bridged back, the smart contract will unlock tokens from the bridging contract on the first chain and burn the tokens which were issued on the other chain, conserving the supply.

Alternatively, you can use a cross chain swap to swap tokens directly from one chain to another without having to switch between platforms, wrap tokens, or worry about what bridge to use. 

Problems with crypto bridges

Being able to trade across networks is fast becoming an essential part of DeFi, with around 5% of all DEX volume being traded through bridges in 2023. Traders are starting to look for ways to capitalize on up-and-coming projects on blockchains where they have never previously invested, but the bridging experience can be slow, frustrating, and expensive, both in terms of fees and also in terms of missed opportunities. 

Finding a reliable bridge to use can be difficult, as even the most popular cross chain bridges may have hidden defects. 

• Some crypto bridges take over an hour to settle a transaction.
• There is a risk of losing your crypto to bridge exploits.
• Finding an official bridge can be hard as domains can be spoofed.
• Many bridges have additional fees on top of actual onchain costs.

Generally, it is best to do research into other users’ experiences before sending your assets to a bridge. You should weigh up the tradeoffs between the time the bridge will take, the fees it will cost, and any additional steps you will need to perform to end up with the token you want. And there is still always a small chance of losing money if the bridge is hacked or rugged.

Bridge exploits

Each individual bridge is built around a set of smart contracts, and these smart contracts are not always reliable. They can be inefficient, leaving you with less money than you expect on the network you bridge to, or waiting hours for the transaction to finalize.

Bridges can also be exploited, in which case you could be left with nothing at all. That’s because smart contracts, like any program, can contain bugs, backdoors or other vulnerabilities that lead to severe consequences for unlucky users. The team that created the bridge is also likely to have keys that can unlock funds, which a malicious actor might get their hands on, or in rare cases the team may even steal the funds themselves (often called a rugpull). 

Last year, Chainanalysis estimated that $2 billion USD worth of crypto was stolen across 13 attacks on blockchain bridges. Additional findings shared by Token Terminal in 2022 found that bridge exploits accounted for around half of all DeFi exploits.

Getting where you want to go

Another issue with bridges is that they only get you partway to the token you wanted to end up with. Most bridges will only accept wrapped ETH (WETH) or stablecoins, so you will first need to convert assets to WETH, send the WETH to a bridge, and then find a DEX to convert your bridged WETH to the token you actually wanted.

This process is not only time consuming, it can also lead to dead ends. Since most bridges are standalone applications, they won’t tell you what route to take to get where you want to be, or if the token you want is even available at all. That means you need to put in the research before starting, or potentially face a dead-end and have to bridge your assets back. 

Using cross chain swaps instead of regular bridges

Cross chain swaps are a way of trading crypto tokens between different blockchains directly. While they still use bridges, they eliminate the friction of bridging assets manually and combine the bridging step with swaps to ensure you have a full picture of the route from A to B before committing any time or money. 

A Matcha cross chain swap uses Socket to aggregate some of the most reliable and reputable bridges in the industry, mitigating much of the risk outlined above, and packages them into a single flow that also leverages the liquidity of hundreds of DEXs in one platform, using our 0x Swap API. 

That means you can now seamlessly swap tokens between networks in one trade, without having to find the right bridge, give up custody to a centralized exchange, or worry about how to get the token you want on the destination chain.

Since Matcha has access to real-time information about which bridge to use and where the deepest liquidity is, you’ll find that many tokens can be bridged and swapped in as little as a minute, and with no added fees you’re likely to get a better deal than you would trying to navigate the route yourself!

Seize opportunities across blockchains without a second thought. Take your trading multichain and tap into the liquidity of hundreds of decentralized exchanges at once on Matcha!