Crypto bridges, also known as blockchain bridges or cross-chain bridges, enable the transfer of assets between two different blockchain networks. Most blockchain networks operate as individual systems with their own software code, rules, models, and tokens. Unfortunately, this limits their ability to transfer and integrate digital assets such as crypto and NFTs, between different networks.

For instance, if a user has Bitcoin in their wallet and wants to exchange some of it for Ethereum, or if they want to move some of the funds from the Bitcoin network to the Ethereum network, they need a way to convert the funds and move them across networks. This is where crypto bridges come in.

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How Crypto Bridges Work

Crypto bridges allow users to flexibly transfer assets between different networks and addresses. Usually, they lock assets from the source blockchain in a smart contract and mint an equivalent amount of "wrapped" assets or tokens on the destination blockchain. When the wrapped assets are transferred back to the original blockchain, they are burned and the original assets are unlocked.

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Types of Crypto Bridges

• Trusted Bridges: These rely on centralized middlemen such as financial institutions to manage the transfer of assets between blockchain networks.
• Trustless Bridges: These are decentralized bridges that use smart contracts and algorithms to automate the transfer of assets between networks.

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Advantages of Crypto Bridges

• Interoperability: They allow different blockchain networks to interact with each other.
• Liquidity: By allowing assets to move between blockchains, bridges increase the liquidity of tokens and cryptocurrencies across the ecosystem.
• Accessibility: Bridges make crypto assets accessible on multiple blockchain platforms, where they can be used in various DeFi applications, NFT marketplaces, and more.

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Disadvantages of Crypto Bridges

• Security vulnerabilities: Bridges can suffer from security breaches and hacking attacks.
• Centralization risks: Because trusted bridges introduce centralization into a decentralized ecosystem, they can come with the inherent risks of centralization such as censorship and third-party manipulation of funds. 
• Technical limitations: The efficiency and speed of transfers can be limited by the networks involved as well as the capacity of the bridge itself.

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Examples of Crypto Bridges

In this example, the Stargate Bridge is used to transfer $USDT on the Polygon network to $BNB tokens on the BNB Smart Chain network within a Metamask wallet address.

Here’s another example using KTX.Finance to bridge assets between networks from one wallet to another:

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Step 1

Access ktx.finance in your mobile or desktop browser.

Step 2

In the navigation bar, go to Ecosystem → Bridge Assets.

This will take you to the Axelar-powered bridge.

Step 3

Connect your wallet.

Step 4

Select the token and network you are bridging from and the token and network you are bridging to.

In this example, we'll be bridging $USDT tokens on the Polygon network in an OKX wallet to $MNT on the Mantle network in a Metamask wallet.

Step 5

Select the destination address.

Note: KTX does not support CEX wallets as destination addresses.

Step 6

Review the details and submit.

Step 7

Confirm the transaction in your wallet.

Step 8

Wait for the transaction to finish processing. This may take several minutes.

Step 9

Congratulations! The funds have been successfully bridged. You can check them in your wallet.

Overall, bridges are a crucial part of the crypto ecosystem, and understanding their mechanics, fee structure, and underlying technology will make you better at managing your asset portfolio.

Excited to learn more about crypto exchanges, deFi platforms, and tokenomics? Check out our other short guides!