Cross-chain Bridges Ecosystem Overview: Current Development, Technical Solutions, and Future Trends

Currently, there are at least 126 independent Layer 1 chains in the blockchain ecosystem. These chains each have their own characteristics, such as Bitcoin primarily serving as a store of value, while Ethereum has built a rich application ecosystem. With the growing demand for cross-chain solutions, cross-chain bridges that connect different chains have emerged.

This article will conduct a comprehensive analysis of 71 mainstream cross-chain bridge projects from three dimensions: ecological status, technical solutions, and development trends.

Cross-chain ecosystem status

Cross-chain has become a common phenomenon in the blockchain industry:

1. There are numerous cross-chain bridges. The number of cross-chain bridges on Ethereum, BNB Chain, and Polygon has reached 100, 68, and 48 respectively.

2. The variety of cross-chain assets is rich. Taking BTC as an example, it has derived multiple cross-chain assets such as WBTC and anyBTC. NFT cross-chain is also on the rise.

3. Cross-chain penetration into various ecosystems. Mainstream public chains and Layer 2 have adopted cross-chain solutions, with Ethereum ecosystem cross-chain locked assets reaching $7.8 billion.

4. Cross-chain assets are widely used in DeFi, such as WBTC in lending markets and ceUSDC in DEX.

The most active ecosystems for cross-chain currently are Ethereum, BNB Chain, Polygon, Avalanche, and Fantom. The main cross-chain assets include USDC, USDT, MATIC, ETH/WETH, and DAI. The cross-chain bridges with higher TVL include Polygon Bridge, Arbitrum Bridge, and Optimism Bridge.

Cross-chain bridges technology solutions

The main technical solutions for cross-chain bridges can be divided into three categories:

Locking + Minting/Burning type

A typical representative is WBTC. Users lock original assets and mint equivalent assets on the target chain. Security mainly relies on smart contracts or third-party custody.

liquidity pool type

Establish liquidity pools on the source chain and target chain, allowing users to directly exchange cross-chain assets. Representative projects include ThorSwap, Hop Exchange, and others. LayerZero further optimizes this model through unified liquidity pools and cross-chain communication.

atomic swap type

Using hash time-locked contracts to achieve peer-to-peer asset exchanges without the need for third-party custodians. cBridge is a representative of this type of solution.

Cross-chain Development Trends

1. The Layer2 official bridge focuses on security and is dedicated to cross-chain between Layer1 and Layer2.

2. Cross-chain aggregators provide multiple routing options to optimize user experience.

3. An increasing number of cross-chain bridges offer Staking, enhancing the utilization of funds.

4. NFT cross-chain has become a new growth point, but it faces more technical challenges.

5. The combination of cross-chain liquidity pools and the DeFi ecosystem enhances capital efficiency.

6. Other innovations such as support for CEX cross-chain, multi-currency cross-chain, etc. are constantly emerging.

Despite the security challenges faced by cross-chain bridges, the demand for cross-chain solutions will still exist in the long term. Future development opportunities for cross-chain bridges include achieving full-chain interoperability, deep integration with DeFi, cross-chain for NFTs, and focusing on specific ecosystems such as Layer 2 or non-EVM chains. The cross-chain bridge sector remains full of potential and variables.