- May 5, 2022
- Posted by: DxMinds
- Category: Blockchain Development
Blockchain is a platform used for secured online transactions. The expansion of blockchain is endorsing the use of this platform with the interoperability feature as the prime focus. At the time of blockchain inception, the transaction was possible within the network only. But, with the growth of technology such as blockchain bridge, now users are capable of making successful transactions between two unique blockchain networks using distinct consensus mechanisms.
Blockchain bridges are the major element responsible for blockchain expansion, as it is making different chains interoperable allowing users to share smart contract instructions with different chains and execute them for a successful token transfer. There are several blockchain companies heading forward to blockchain development companies in New York to leverage the potential of decentralized token bridge.
Before you start with the development of the blockchain bridge between Ethereum and Binance smart chain, you must be aware of what is blockchain bridge and what are the benefits of the same.
As the name suggests, the blockchain bridge is a technology that helps different blockchains to connect and interact with each other. Every blockchain is developed with a distinct consensus mechanism and these bridges help the blockchain to understand and execute the instructions from various blockchains.
Before the inception of blockchain bridges, the blockchains were restricted within the origin and were unable to establish any contact with any exterior blockchain network. Now, blockchain bridges have enabled data transmission and transfer of tokens in different blockchain networks. There are a few widely used blockchain bridges, namely Matic, binance, xPollinate, and more.
Here are a few benefits listed which will help you to understand the importance of blockchain bridge:
- A dApp can be created using two different blockchains, hence blockchain users are not required to stay dependent on the host blockchain
- Users can make inter-platform transactions with different consensus mechanisms
- Blockchain bridges allow the user to switch instantly between cryptocurrency and stable coin
- Using blockchain bridges you can easily host digitally on a dApp
Types of blockchain bridges:
If you are looking forward to developing a blockchain bridge and willing to understand the working of blockchain bridges then first you must be aware of the types of blockchain bridges. Currently, two major types of bridges are used, namely trustless bridges and federated bridges. A brief description of these bridges along with their mechanism is mentioned to help you understand these bridges better.
- Federated bridge:
It is more commonly known as a centralized bridge which is used for centralized exchanges where the user interacts with a middleman as a pool. The middleman can be an individual or a company. In such type of blockchain bridge, when a user initiates a transaction for exchange between ether and BNB, the transaction will take place with two different pools. If the sender is initiating a transaction with ether then it gets added to the pool and the user will get an equivalent amount of BNB from the second pool. For this transaction, a small processing fee will be charged by the centralized authority.
- Trustless bridge:
These are the decentralized bridge independent of any third-party interventions. These bridges don’t require any API to administer the process of minting the token and burning it. Instead of APIs, the trustless bridge uses a smart contract which is the main player in this bridge. When a user initiates a transaction in a blockchain using the trustless bridge, the smart contract freezes the crypto and releases tokens equivalent to the transacted crypto.
Features of a bridging solution:
Lock and mint:
Blockchain transaction between two different nodes is a two-step process in which a token is not transferred from one network to another. Instead, the blockchain freeze the token transferred by the user within the same blockchain, and then an equivalent token of the transferred token is minted on the receiving end. Here, if a user is willing to withdraw the token, then the bridge burns the frozen token and returns it.
These types of blockchain bridges are more popular as compared to others. Trust-based solutions include a trusted custodian or a merchant who controls the tokens transfer via digital wallet helping the blockchain users to transfer the token more easily. Hence, trust-based solutions add flexibility to the process.
Just like a bridge connects two different blockchains, in the same way assisting a sidechain connects the parent blockchain network to its child.
In the blockchain transaction, there is a bridge validator who acts as the operator of the network. The network operator is responsible to exchange tokens from one end to another based on the request generated.
To transfer assets from one blockchain of a certain value to another with a low fee, cross-chain collaterals are used. With the inception of cross-chain collaterals, now users can borrow assets from cross-chains, unlike traditional ways which were restricting the user to borrow the assets only within the native chain.
Steps to build a decentralized token bridge between Ethereum and Binance smart chain:
- Setup a smart contract for the base of the bridge
- Deploy the bridge base code and then deploy binance bridge
- The next step is to deploy the Ethereum token bridge
- After deploying the bridge base and smart contracts, you need to mint and burn the IToken
- The next step after minting and burning the IToken is to write a smart contract for the token base
- Once the token is deployed, the next step is to deploy the token on Binance smart chain and Ethereum
- The next step is the deployment of a bridge between Ethereum and Binance smart chain
- Post bridge deployment you can deploy the decentralized bridge
- Then you need to code the program for bridge API that carries token transfer events
- Deploy the private key function to the Ethereum bridge
- The last step is to program the token balance function for the bridge
The blockchain bridge is making the use of blockchain more efficient and making it one of the major streams of technology. The bridging solution is empowering the prospects of the decentralized system by enabling peer-to-peer transactions across various blockchain networks. The deployment of a blockchain bridge is very simple and can be easily achieved with the help of a blockchain developer in Washington DC.