Bridges between networks - how assets are moved and why it is the riskiest place

Ethereum, Base, Polygon and BNB Chain do not know about one another: a token on one network cannot simply "move" to another. Bridges are used for the transfer. They are very convenient but historically the most vulnerable element of the crypto world. For the differences between networks, read the article on choosing a network.

Why an asset cannot simply be "forwarded"

Each network keeps its own ledger. If you have 100 USDC on Ethereum, that record is not reflected on Base. To "move" money you must remove it from one ledger and create an equal amount in the other. A bridge is the mechanism that does this consistently.

How bridges work

1. Lock-and-mint. Tokens are locked in a contract on network A, and a wrapped token for the same amount is issued on network B. Going back means burning the wrapped one and unlocking the original. One contract holds all the money - which is why it is a juicy target.

2. Burn-and-mint. The token issuer (for example Circle for USDC) burns tokens on one network and issues "native" ones on another. There is no wrapped copy: it is the same token, just on another network.

3. Liquidity pools. A service holds a stock of tokens on both networks. You deposit a token on network A and it issues from the pool on network B. Fast, but it needs liquidity and trust in the service.

Native and third-party bridges

On the reasons for the withdrawal delay see the article Layer 2 and rollups.

Known hacks

Bridges hold huge sums in one place, which is why they are known for the biggest thefts in crypto history. Known cases include Ronin (around 600 million dollars, 2022), Wormhole (around 320 million, 2022) and Nomad (around 190 million, 2022). The causes differed: stolen validator keys, a bug in message-verification code, wrong initialisation. The general lesson: the more complex a system and the more money in it, the more attractive it is to attackers (catalogue of vulnerabilities).

Risks for a user

• A bridge vulnerability. If a bridge is hacked, wrapped tokens lose their backing and may depreciate.
• Different "versions" of a token. For example USDC (native) and USDC.e (wrapped through a bridge) are different tokens. An application may support only one.
• A wrong network or address. A mistake in the network can lead to loss.
• Delays. A withdrawal can take minutes, hours or days.
• Phishing. Fake "bridges" steal funds (how not to fall for it).

How to move money more safely

1. The simplest way is not to use a bridge. If the money is on an exchange, withdraw it straight to the network you need. Most exchanges support withdrawal to Base, Polygon, BNB Chain and Ethereum.
2. For tokens with native multi-network support (such as USDC) the issuer's official mechanisms are better.
3. Use well-known bridges and re-check the site address against a bookmark or official source.
4. A test amount first. Send a small amount, wait and check.
5. Do not hold large sums in wrapped tokens longer than necessary.
6. Make sure the token suits the deal. The service accepts a specific set of tokens (tokens).

Example

A buyer holds USDT on BNB Chain while the seller demands the deal on Base. Option A: the buyer moves USDT through a third-party bridge operator, pays a fee, waits, checks receipt, and then creates the deal. Option B: the parties agree on the deal right on BNB Chain, where the buyer already has everything needed. Option B is simpler and safer: with no bridge there is no bridge risk.

What to read next

Compare fees and networks: fees by example. For security in general, the checklist.