What Is Cross-chain?
Also known as: Cross Chain, Interoperability
In short
Cross-chain is the general name for technologies that enable the transfer of assets, data or messages between different blockchain networks; bridges, atomic swaps and cross-chain messaging protocols fall within this scope.
Blockchains are by nature isolated from one another; the Bitcoin network cannot see a transaction on Ethereum on its own. Cross-chain solutions were developed to overcome this isolation. One common method is the lock and mint model: the asset is locked in a contract on the source chain, and a wrapped token representing it is minted on the destination chain. Some bridges burn the asset on the source and re-mint it on the destination, while others use liquidity pools on the two chains.
Beyond asset transfers, protocols such as LayerZero, Chainlink CCIP, Wormhole and IBC in the Cosmos ecosystem provide general-purpose message passing between chains. This allows a smart contract on one chain to act on an event on another chain. For example, a user can move their USDC on Ethereum to Arbitrum through a bridge and use it there with lower fees.
Because bridges hold large amounts of locked assets, they are among attackers' primary targets; in the attacks on the Ronin and Wormhole bridges in 2022, hundreds of millions of dollars' worth of assets were stolen. Small validator sets, smart contract bugs and a wrapped token losing its collateral are the main risks.
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