What is a crypto bridge?

What is a bridge? A bridge is an application that uses cross-chain communication technology to enable transactions between two or more networks, which can be Layer 1s, Layer 2s, or even off-chain services. Simply put, a bridge allows crypto holders to transfer their assets from one network to another.

Can you exchange cryptocurrency without a cross-Chain Bridge?

Exchange across different blockchains for cryptocurrency is possible without a cross-chain bridge, but it is expensive and more time-consuming. Without the use of a cross-chain bridge, users must first convert a cryptocurrency token into a fiat currency, which often involves fees.

How much cryptocurrency is locked in bridges in 2022?

According to DeFi Llama, there was $21.8 billion worth of crypto locked in bridges as of March 2022. The largest blockchain bridge is Wrapped Bitcoin, accounting for almost half of the bridge market, with $10.2 billion in total value locked (TVL). DeFi Llama pegs Multichain as the largest cross-chain bridge, with about $7 billion in TVL.

How can a bridge help a new blockchain?

By using a bridge, Ethereum could offload some of its transactions onto another blockchain that is better equipped to handle them. Bridges also have the potential to help new blockchains get off the ground. By using a bridge, a new blockchain can offer its users access to the assets and services of an already established chain.