What are blockchain bridges?
To begin with, let’s start with the basic question of what exactly a blockchain bridge is. Blockchain bridges are connections that allow the transfer of tokens, data or even smart contract instructions from one blockchain to another. The bridges enable interoperability between different blockchain networks such as Ethereum and Solana. Without it, blockchains would be nestled in isolation, drastically lowering the viability for users.
Why do we need bridges?
As we have discussed in the previous article, cross-chain interoperability is inevitable in the future of DeFi. The first DeFi projects were built on Ethereum. However, with increasing gas fees and a slow rollout of Ethereum 2, many users and developers started searching for alternatives. A set of EVM (Ethereum Virtual Machine) compatible blockchains were developed due to the concerns, with Binance Smart Chain being the most prominent one. This expanded the hosting service options for DeFi services without modifying the codebase (as they are EVM-compatible).
Furthermore, with faster, next generation blockchains, the speed and marginal transaction costs brought in new possibilities to the DeFi ecosystem. However, without cross-chain interoperability, each DeFi project will ultimately remain an isolated economy without the ability to evolve together with advancements in the industry. That is why APYSwap started with a vision of bringing DeFi services from multiple blockchains together by cross-chain interoperability.
We have already achieved this through the creation of a Layer 2 blockchain where users can trustlessly swap accounts & assets from multiple Layer 1 blockchains. Including Ethereum, Polkadot EVM Parachains, HECO, and Binance Smart Chain. Now we are expanding this list even further to support non-EVM based blockchains with our Solana bridge in the promise of lighting fast transaction speeds and further interoperability for our vaults.
How do APYSwap bridges work?
After analyzing the recently launched Wormhole bridge, we decided to approach bridging from the modular design perspective. This will allow us to add new blockchains quickly and reliably. In addition, we decided to move the oracle consensys on-chain, making us much more transparent than our competitors. This also allows oracles to specialize within the system and they are free to pick the blockchain to operate in and get appropriate compensation with no requirements to monitor all of the blockchains at once.
When talking about EVM-compatible bridges, currently APYSwap has implemented cross-chain support for Ethereum, HECO and Binance Smart chain by using layer 2 protocols as a bridge. For EVM blockchains, we could essentially use the same bridge contract on different blockchains. This could also be applied to the case of Polkadot EVM Parachains, as we could make use of virtual machines that are compatible with Ethereum-based smart contracts to connect with the Polkadot ecosystem with more parachains supporting smart contracts now.
What is in the future?
Solana has attracted a lot of attention recently as an emerging blockchain that promises more scalability through their new consensus mechanism, and we are very excited to introduce Solana bridge to expand our supported blockchains list. Right now the bridge infrastructure allows token exchange between Ethereum, Solana, Binance Smart Chain and Huobi Eco Chain. Even though only the APYS token can be swapped at the moment, it can be done from any of the listed blockchains. We believe that supporting non-EVM based blockchains like Solana is a step in the right direction, furthermore, with our modular bridges, new blockchain support can be easily added, so the list of supported blockchains will continue to grow.