Module 3: How Blockchains and Transactions Work
Bridges and Moving Between Chains
Chapter 10 of 13 · about 6 minutes
10.1 Four ways to move the same money
Mint had 1,000 USDC on Ethereum mainnet and wanted to use it on a Layer 2. A quick search showed at least four options: the Layer 2's official bridge, a popular third-party bridge, a bridge aggregator, and withdrawing via an exchange.
"Do they all do the same thing?" Mint asked.
"They all get you to the same place," said Hash. "But they work in completely different ways, and they ask you to trust different things. Bridges have lost billions of dollars to hacks, so this is worth understanding."
Module 2, Chapter 9 introduced bridges briefly. This chapter explains how they actually work.
10.2 The core problem
Blockchains can't directly see each other. Ethereum has no idea what's happening on another network, and vice versa. Tokens can't literally travel from one chain to another.
So a bridge has to do two things: make sure the asset is removed or locked on the source chain, and create or release an equivalent asset on the destination chain. The hard part is the message in the middle: how does the destination chain know, reliably, that the first step really happened?
How a bridge answers that question determines how much you're trusting it.
10.3 Four bridge designs
Lock and mint. The bridge locks your tokens in a smart contract on the source chain, and mints a wrapped version on the destination chain. To return, you burn the wrapped token and the original is unlocked. The wrapped token is only worth something as long as the locked originals are safe.
Burn and mint. The asset is destroyed on the source chain and freshly created on the destination chain. This works best when the token's own issuer controls the process. For example, some stablecoin issuers run their own cross-chain transfer systems, which burn the stablecoin on one chain and mint the native version on another, avoiding wrapped versions.
Liquidity networks. The bridge holds pools of the same asset on many chains. You deposit on the source chain, and the bridge pays you from its pool on the destination chain. No new tokens are created. The pools are rebalanced over time.
Intent-based bridges. You state what you want, for example "1,000 USDC on Ethereum to at least 998 USDC on this Layer 2." Independent participants called solvers or relayers compete to deliver it to you on the destination chain quickly, using their own funds, and are repaid later from your deposit.
| Design | How you receive funds | Main risk |
|---|---|---|
| Lock and mint | A wrapped token, backed by locked originals | If the locked funds are stolen, wrapped tokens can lose their backing |
| Burn and mint (issuer-run) | The native token, minted by its issuer | Depends on the issuer's system |
| Liquidity network | The native token, from a pool | Pool smart contract risk; limited liquidity for large amounts |
| Intent-based | The native token, from a solver | Smart contract risk in the settlement system |
Chapter 10 · Lock and mint vs liquidity network
Two rows, each moving 1,000 USDC from Ethereum through a bridge to a Layer 2. Lock and mint: your USDC is locked in the bridge contract, marked as a risk point labelled 'honeypot: hacks drain this', and wrapped USDC is minted on the Layer 2, also marked as a risk because it is backed only by the locked originals. To return, the wrapped token is burned and the original unlocked. Liquidity network: your USDC is deposited into the bridge's pool on Ethereum; the bridge pools on both chains are marked as a risk point for contract risk and running short on large amounts; native USDC is paid out from the destination pool and no new tokens are created.
10.4 Who verifies the message?
The second big question is who confirms that your deposit happened on the source chain.
Canonical rollup bridges are the official bridges of rollups (Chapter 8). They rely on Ethereum itself verifying the rollup's state, so they inherit much of Ethereum's security. The trade-off is speed, especially for withdrawals from optimistic rollups.
Externally verified bridges rely on a group of validators, a multisig, or a network of signers to watch the source chain and approve messages. They can be fast and connect many chains, but if enough of those signers are compromised, the bridge can be drained.
Light client and proof-based bridges verify the source chain cryptographically on the destination chain, using compact proofs. They aim to remove trusted intermediaries, but are complex to build and not available for every pair of chains.
"So with some bridges, I'm trusting a small group of signers," said Node.
"Sometimes a very small group," said Hash. "Which is why so many bridge hacks happened."
10.5 Bridges under attack
Bridges often hold enormous amounts of locked assets in one place, making them prime targets. Three major examples from 2022:
| Incident | Approximate loss | What went wrong |
|---|---|---|
| Ronin bridge, March 2022 | Over $600 million | Attackers gained control of enough validator keys to approve fake withdrawals |
| Wormhole, February 2022 | About $320 million | A flaw let the attacker mint wrapped tokens without depositing real ones |
| Nomad, August 2022 | About $190 million | An update bug let almost anyone copy a valid withdrawal and change the recipient |
When a lock and mint bridge is hacked, the damage spreads. If the locked originals are stolen, the wrapped tokens on the other chain may no longer be fully backed. Anyone holding those wrapped tokens, even people who never used the bridge, can suffer losses. In some cases, projects or investors stepped in to restore the backing. In others, they didn't.
10.6 Mint's choice
Here's how Mint compared the four options for moving 1,000 USDC from Ethereum to a Layer 2. Costs and times are illustrative.
| Route | Approximate time | Approximate cost | What Mint receives | Trust involved |
|---|---|---|---|---|
| Official rollup bridge | Minutes going in | Ethereum gas | Depends on token setup; may be bridged USDC | Ethereum and the rollup's contracts |
| Issuer-run burn and mint | Minutes | Gas on both chains | Native USDC | The stablecoin issuer's system |
| Intent-based or liquidity bridge | Seconds to minutes | Gas plus a small fee | Native USDC | The bridge's contracts and settlement system |
| Withdraw via exchange | Minutes to hours | Exchange withdrawal fee | Native USDC | The exchange, temporarily holding the funds |
There's no single right answer. For depositing into a rollup, the official bridge is often a good default. For withdrawing from an optimistic rollup quickly, a reputable intent-based or liquidity bridge avoids the seven-day wait. For large amounts, splitting across routes or using the most battle-tested option reduces risk.
10.7 Bridge safety checklist
- Prefer native assets over wrapped versions where possible, since they don't depend on a bridge's locked funds.
- Use well-established bridges with long track records and published audits.
- Understand the trust model: is it verified by Ethereum, by cryptographic proofs, or by a small group of signers?
- Bookmark bridge websites. Fake bridge sites are common (Module 2, Chapter 10).
- Test with a small amount first, especially on a new route.
- Check the destination token is the version your intended application accepts.
- Don't leave large amounts in wrapped bridged assets for long periods if native alternatives exist.
- Review approvals you've granted to bridge contracts afterwards (Module 2, Chapter 8).
10.8 Try it yourself
Use a bridge aggregator to get quotes, without executing, for moving 100 USDC and 100,000 USDC from Ethereum to a Layer 2 of your choice. Compare the routes, fees, estimated times, and whether you'd receive native or bridged USDC. Notice how the best route changes with the amount.
Then look up the trust model of one bridge you see: who or what verifies its messages?
Key takeaways from this chapter
- Blockchains can't see each other, so bridges must lock or burn assets on one chain and release or mint them on another.
- Main designs include lock and mint, burn and mint, liquidity networks, and intent-based bridges.
- Bridges differ in who verifies messages: Ethereum itself, cryptographic proofs, or external signers.
- Bridges have suffered some of crypto's largest hacks, including Ronin, Wormhole, and Nomad.
- Hacks of lock and mint bridges can leave wrapped tokens unbacked, affecting holders who never used the bridge.
- Prefer native assets, established bridges, and small tests. Know the trust model before bridging large amounts.