September 20, 2023
Understanding Cross-Chain Bridging with Rhino.fi
The surge in Layer 2s and alt-chains has given rise to cross-chain bridging—an vital tool to access all of the diverse blockchain opportunities on offer.
In this article, we demystify cross-chain bridging, explaining its concept, operation, and how you can harness it to connect with various blockchains using rhino.fi.
As the crypto landscape evolves towards DeFi, understanding cross-chain bridge mechanics is key to unlocking the potential within each ecosystem. From multi-chain bridging to the nitty-gritty of crypto bridge operations, we’ve got you covered.
Glossary: How to Bridge in DeFi
Bridging to the large number of Layer 2s that rhino.fi connects to couldn’t be simpler.
All you’ll need is a MetaMask wallet, some ETH (or the relevant chain asset), and a few minutes, and you’ll be navigating like a pro. Whether it’s bridging to zkSync or hopping over to opBNB, Rhino.fi has your back, offering the cheapest and quickest transactions in town.
We will be updating this blog with step by step guides to each ecosystem, so check back in for new guides to be added soon.
What is Cross-Chain Bridging?
Blockchains are designed as isolated islands, each with its unique rules and code. While this robustness adds security, it also isolates these islands, making it challenging for them to communicate. If you hold assets on one blockchain, you’re free to explore, exchange, and engage within that ecosystem. However, transferring tokens between different blockchains isn’t straightforward.
In the traditional fiat world, swapping currencies between different lands is a breeze. The crypto world should be no different. That’s where bridges come into play. Bridges act as intermediaries, bridging the rules and code of two distinct blockchains, enabling data and value to flow seamlessly.
How Bridges Are Categorized: Transfer types and Trust Assumptions
Bridges can be categorised by both transfer type (simple to complex), and trust assumptions (strong to weak). Let’s deal with transfer types first.
There are five types of bridges, although the design space is large and the lines are blurred. The five main types of bridges, according to transfer type, are:
Lock & Mint e.g. Polygon official bridge, StarkNet official bridge, Shuttle.
Token Issuer Burn & Mint e.g. MakerDao, Arbitrum Teleport.
Specialised Burn & Mint e.g. Hop, Debridge.
Atomic Swap e.g. Stargate.
Third Party Networks/Chains e.g. Thorchain.
We’ve written before about transfer types, you can read it here.
In addition to various token transfer methods, considering trust assumptions is crucial. Each bridge falls on a spectrum from strong trustworthiness (not ideal) to weak trustworthiness (preferred). Trust levels can be categorized as follows:
Centralized Bridges e.g. the Binance-to-Arbitrum bridge.
Validator/Multi-Sig Bridges e.g. Wormhole, Axelar, and Connext.
State Proof Bridges e.g. StarkEx to Ethereum, ZKSync to Ethereum, Nomad, Hop, Axelar, and Mina.
Protocol-Level Bridges e.g. Cosmos IBC.
How does the Rhino.fi Bridge Work?
At Rhino.fi, we operate a system based on collateralized bridges and liquidity outposts—token pools strategically positioned across various chains, backed by us.
The driving force behind this process? Smart contracts.
Users supply rhino.fi with assets on one chain, and through our smart contracts and StarkEx technology, rhino.fi provides corresponding assets from our pool on another chain.
The benefits of this method lies in its adaptability, enabling seamless onboarding for new chains. In essence, we can bring you the hottest chains as soon as they launch. It also ensures a seamless user experience with one-click bridging and nearly instant transactions—deposits within minutes, withdrawals within seconds.
We’ve written more extensively about this here.
How to Use the Rhino.fi Bridge
Step 1: Connect your wallet
When entering the app for the first time, you will see a ‘connect wallet’ button in the top right hand corner.