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Redirected from: Layer 1 bridge

Definition: blockchain interoperability


Transferring assets from one blockchain to another. Blockchains are independent networks with different protocols. In order to exchange assets between them, users can for example, convert token A on blockchain A to fiat and then convert fiat to token B on blockchain B. This takes time and incurs fees. In contrast, a "cross-chain bridge" can perform the transfer with one transaction and a smaller fee. In addition, cross-chain bridges can exchange NFTs as well as smart contracts.

There are various approaches; for example, the transfer may use a smart contract to lock up tokens in the source chain and create new ones on the destination chain as a "wrapped" version, such as turning BTC (bitcoins) into wBTC (wrapped bitcoins). Messaging between blockchains may also be available with the bridge provider. See wrapped token, THORChain and IBC protocol.

Not the Same as Layer 2 Bridges
Layer 2 networks are sometimes said to have channels or bridges to Layer 1 chains. However, Layer 2 networks and sidechains are designed to handle multiple payments quickly and settle them in summary fashion on Layer 1 chains. They may be "crossing chains," but the interaction is a regular crypto transaction. See Layer 2 blockchain.