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Cross-chain bridges ecosystem panorama: development status, technical solutions and future trends
Cross-chain Bridges Ecological Panorama: Development Status, Technical Solutions, and Future Trends
In the current blockchain ecosystem, the number of Layer 1 public chains has exceeded 100. These blockchains each have their own characteristics, such as Bitcoin focusing on electronic cash transfers and Ethereum emphasizing application ecosystems. The flow of assets and information between different chains has become an inevitable trend, leading to the emergence of cross-chain bridges.
Cross-chain Ecosystem Status
Cross-chain has become a common phenomenon in the blockchain world:
There are numerous cross-chain bridges. The number of cross-chain bridges on major public chains such as Ethereum, BNB Chain, and Polygon has reached 100, 68, and 48, respectively.
There are various types of cross-chain assets. Taking BTC as an example, it has derived multiple cross-chain assets such as WBTC, anyBTC, VBTC, etc. NFT cross-chain also brings more new types of assets.
Cross-chain penetration into various ecosystems and applications. Mainstream public chains and Layer 2 have adopted cross-chain solutions, with the bridge lock-up amount in the Ethereum ecosystem reaching $7.8 billion. Some cross-chain bridges, such as Multichain, have connected 55 chains or layers.
A large number of cross-chain assets are used in DeFi, such as WBTC in lending markets and ceUSDC in DEX.
Currently, the most active ecosystems in cross-chain are Ethereum, BNB Chain, Polygon, Avalanche, Fantom, etc. Among cross-chain assets, USDC has the highest proportion, followed by USDT, MATIC, ETH/WETH, and DAI. The cross-chain bridges with the highest TVL rankings include Polygon Bridge, Arbitrum Bridge, Optimism Bridge, StarGate, WBTC, etc.
cross-chain technology solutions
The essence of cross-chain is to mint and burn certificates representing asset value on different chains, or to directly exchange native assets and cross-chain assets. The main technical solutions are:
1. Locking + Minting/Burning
A typical representative is WBTC. Users lock BTC with a custodian, and the issuer mints an equivalent amount of WBTC on Ethereum. When redeeming, WBTC is destroyed and BTC is released.
Advantages: Simple and intuitive operation Disadvantages: Reliance on third-party custody, there is a risk of single point of failure.
Others that adopt this solution include Polygon Bridge, Arbitrum Bridge, Rainbow Bridge, etc.
2. Liquidity Pool
Set up liquidity pools on the source chain and target chain to hold native assets and cross-chain assets. Users can directly exchange assets from the pool when performing cross-chain transactions.
Advantages: cross-chain speed is fast Disadvantage: LP bears greater risk.
The platforms that adopt this solution include ThorSwap, Hop Exchange, Synapse Bridge, etc.
LayerZero has optimized on this basis, improving efficiency and security through a unified liquidity pool and cross-chain message verification mechanism.
3. Atomic Swap
Direct asset exchange is achieved through hash time-locked contracts without the need for an intermediary.
Advantages: High degree of decentralization, good security. Disadvantages: High compatibility requirements between chains
cBridge is a representative project that achieves atomic swaps through state channels and the SGN validation network.
Cross-chain Development Trends
The Layer2 official bridge focuses on security and only supports cross-chain transactions between the mainnet and Layer2.
Cross-chain aggregators improve user experience by providing multiple routing options.
An increasing number of bridges offer staking features, optimizing liquidity pool depth.
NFT cross-chain has become a new potential track, facing more technical challenges.
Participate in the DeFi ecosystem with cross-chain liquidity pools to improve capital utilization.
Other innovations such as supporting CEX cross-chain, multi-currency simultaneous cross-chain, multi-receiver cross-chain, etc.
Despite the security risks, cross-chain is still an indispensable infrastructure in the blockchain world. Possible future directions include full-chain interoperability, cross-chain DeFi, NFT cross-chain, and specific ecosystem cross-chain, among others. This field is still full of opportunities and challenges.