On September 8, 2021, Dmitriy Berenzon, Research Partner at 1kxnetwork, an early-stage crypto fund that helps founders start token networks, published a comprehensive research paper on blockchain bridges. Berenzon’s study highlights the current “multi-chain market structure” and the bridges that make a myriad of blockchains compatible.
Researcher: “We are finally in a multi-chain market structure”
For quite some time now, multi-chain or cross-chain technology has been something of a holy grail in the cryptocurrency development space. People want to transact with other blockchains by leveraging bridges to different ecosystems.
Dimitri Berenzon published a detailed article on the subject of cross-chain technology and bridges, and he believes that we have finally reached a decisive moment. “After years of research and development, we are finally in a multi-channel market structure,” Berenzon points out in his blog post.
Berenzon’s study examines blockchains like Ethereum, Solana, Tezos, Avalanche, Polkadot, Binance Smart Chain, Cosmos, and more. The researcher notes that “interoperability unleashes innovation” as he points out that “bridges are important because they allow users to access new platforms, protocols to interact with each other, and developers to collaborate in the creation of new products”.
Additionally, Berenzon lists the many benefits of cross-chain interoperability, such as leveraging technology for external validators and federations. Also, using technology for thin clients and relay protocols alongside the ability to access liquidity networks.
However, Berenzon’s report is not just a fintech article, and he points out that technology and cross-chain bridges are an “incredibly difficult problem in distributed systems”. He adds that things like finality and rollbacks need to be addressed, NFT transfers and provenance, and stress testing of these blockchain bridges over time.
$7.7 billion locked on 8 bridges to Ethereum
In addition to information from Berenzon, statistics from the Dune Analytics dashboard called “Bridge Away” measures bridge volume related to different chains and Ethereum. In terms of Ethereum Bridge Total Value Locked (TVL) stats, the Polygon ERC20 Bridge has around $2.4 billion in TVL on September 16, 2021.
Polygon’s deck represents 32.5% of TVL across eight decks. Registered decks include Polygon ERC20 deck, Arbitrum decks, Avalanche deck, Solana wormhole, Fantom Anyswap deck, Harmony decks, Optimism ERC20 decks, and Near Rainbow deck.
On all these mentioned bridges, there is 7.79 billion TVL spread over 42,997 unique addresses in the last 30 days. The Arbitrum decks control 31.5% of the total TVL and the Avalanche deck holds around 21.2% today.
Solana Wormhole’s TVL is around 6.7% and the Fantom Anyswap Bridge has around 6.6% of the $7.79 billion TVL. Ether and WETH are the top assets held in TVL with $2.9 billion recorded on September 16. USDC is the second largest asset held in the TVL bridge with $1.2 billion recorded. Next is wrapped bitcoin (WBTC), which holds just over $1 billion in the overall TVL bridge total.
What do you think of the technology of multi-chain or inter-chain bridges and the expanding TVL held by these protocols? Let us know what you think about this topic in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons, Dmitriy Berenzon, Various blockchain logos, Dune Analytics,
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