What is a bridge? – Magpie Protocol

Primarily, a bridge for cryptocurrency provides a way to transfer a token between two different blockchains without the need for a third-party intermediary.

A smart contract is used to create a two-way peg between two different chains by locking up or burning (destroying) a token on one blockchain in exchange for an equivalent amount of the same token or asset on the other blockchain. This is done so that the amount of said asset or token does not change, and the user can freely transfer assets between the two blockchains without the need for a third party.

Once the token is bridged/transferred to the new chain, it can be used just like any other token: to swap, provide liquidity, farm, etc.

Currently, there are quite a few different types of bridges that make it even more challenging to figure out what to use to go cross-chain.

With most bridges taking anywhere from fifteen minutes to a few hours (and some even taking a few days,) users trying to catch a deal or quickly join a farm on another chain might find themselves in a tough spot as prices and APR can change drastically in that time.

The other major component of most bridges is that they require users to lock or burn their token in order to receive (or mint) the token or wrapped token on another blockchain. This can be a cause for confusion, or just a pain to deal with, as there are so many different options and you don’t know how long each option takes — sometimes it varies wildly, with the same bridge taking ten minutes one time and over a half-hour on another transfer.

This is a must for the future of DeFi. As all blockchains are independent, decentralization cannot be fully realized and achieved without a secure way to communicate and swap between chains through a decentralized protocol.

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