multichain bridge

Multichain bridges are critical infrastructure in the blockchain technology ecosystem, enabling interoperability and cross-chain transfer of assets, data, and information between different blockchain networks. As the cryptocurrency and blockchain ecosystem has rapidly evolved, numerous independently operating blockchain networks have emerged with significant differences in their design principles, consensus mechanisms, and technical architectures, resulting in a fragmented blockchain landscape. The core value of multichain bridges lies in breaking down barriers between these isolated networks, allowing users to seamlessly transfer assets and data across different chains, thereby enhancing liquidity, efficiency, and user experience across the entire blockchain ecosystem.

Background: The Origin of Multichain Bridges

The concept of multichain bridges emerged from the growing need for blockchain interoperability. Early blockchain networks like Bitcoin and Ethereum were designed as independent ecosystems with no native ability to communicate with each other. As blockchain technology became more widespread and use cases diversified, this limitation gradually became a bottleneck for industry development.
The evolution of multichain bridge technology can be traced through several key phases:

1. Early centralized exchanges: Initial cross-chain asset transfers relied primarily on centralized exchanges, requiring users to create accounts on different chains and use exchanges as intermediaries for asset conversion.
2. Atomic Swaps: Around 2017, atomic swap technology emerged, allowing users on two different blockchains to directly exchange assets without trusting a third party.
3. Cross-chain communication protocols: Protocols specifically designed to address blockchain interoperability issues, including Polkadot's XCMP and Cosmos's IBC, gradually matured.
4. Smart contract bridges: The expansion of the Ethereum ecosystem drove the development of smart contract-based multichain bridge solutions, such as Multichain (formerly Anyswap) and Portal Bridge.

Work Mechanism: How Multichain Bridges Work

Multichain bridges operate based on various technical architectures and trust models, primarily including the following modes:

1. Lock-and-Mint Model:
   • Users lock assets on the source chain
   • The bridge protocol verifies the locking transaction
   • Equivalent tokens are minted on the target chain
   • The redemption process works in reverse: burning tokens on the target chain and unlocking original assets on the source chain
2. Liquidity Pool Model:
   • Maintains asset liquidity pools across multiple chains
   • Users deposit assets on one chain and withdraw equivalent assets from a liquidity pool on another chain
   • Doesn't require direct asset transfer, instead relying on a distributed liquidity network
3. Validator/Relayer Model:
   • A group of validators or relayers monitors events across multiple chains
   • Verifies the validity of cross-chain transactions
   • Executes corresponding operations on the target chain
4. Message Passing Mechanism:
   • Cross-chain message protocols based on cryptographic proofs
   • Allows transmission of arbitrary data and instructions between blockchains, not limited to asset transfers
   • Typically requires light client technology, enabling one chain to verify the state of another

What are the risks and challenges of multichain bridges?

While multichain bridges solve blockchain interoperability issues, they also face various challenges and risks:

1. Security Risks:
   • Smart contract vulnerabilities: Bridge protocol smart contracts may contain vulnerabilities, becoming targets for hacker attacks
   • Insufficient validation mechanisms: Validator collusion or validation logic flaws may lead to asset theft
   • Historical security incidents: Multichain bridges are frequent targets for hackers, with major security incidents affecting Ronin Bridge, Wormhole, Poly Network, and others
2. Centralization Risks:
   • Many multichain bridges rely on multisignature wallets or limited validator sets
   • Centralized components may become single points of failure or censorship risks
3. Liquidity and Efficiency Issues:
   • Cross-chain transactions typically require longer confirmation times
   • Insufficient liquidity on smaller chains may lead to slippage and high fees
   • Bridge fees plus transaction fees on both chains can significantly increase user costs
4. Lack of Interoperability Standards:
   • Absence of unified cross-chain communication standards
   • Limited compatibility between different bridge solutions
   • Bridge complexity grows exponentially as the number of blockchains increases
5. Regulatory Uncertainty:
   • Cross-chain asset transfers involve operations across multiple jurisdictions
   • Regulatory frameworks for cross-chain financial activities remain unclear in many countries
   • Potential compliance challenges and legal risks
     Multichain bridges represent an important direction in blockchain technology development and are key infrastructure for realizing the internet of value. Despite the many challenges currently facing multichain bridge technology, with continued technological innovation and security practices, we can anticipate that multi-chain interoperability will play an increasingly important role in the blockchain ecosystem. In the future development of blockchain, secure, efficient, and decentralized multichain bridges will become crucial connectors between different blockchain networks, facilitating the free flow of value and laying a solid foundation for large-scale application and adoption of blockchain technology.