In recent days, you must have heard of these hot words from somewhere: , , , , , est. - they are all newborn public chains with booming ecos. We can now interact and play with more diverse chains with higher transaction speed and, most importantly, considerably lower gas fees - it is more evident from the TVL (total value locked) of these chains as shown below. Avalanche Tron Near Celo Fantom However, have you ever wondered your assets are being magically "switched" to the other chain? In the real world, when you want to exchange US dollars for Euros, you can simply go to a bank; while in the blockchain world, there are several ways to do it. In this blog, I will try to explain in an easy way the different approaches to realize chain-to-chain transactions. HOW 1. Centralized Exchanges Just as a traditional bank, a centralized exchange (CEX) holds different kinds of tokens and you can simply exchange one for another. The problem is that transactions happen "off-chain" - outside of the blockchain network, and you have to first "withdraw" your tokens from the chain (say, Ethereum) to your off-chain wallet, and then purchase your target token in a CEX, before finally depositing the target token to the target chain. It can only be a temporary remedy rather than a long-term solution in a world that advocates decentralization. 2. Mapping Assets (Bridges) Here I define these bridges as asset mapping instruments using mint/burn techniques, which simply help you "navigate" the same kind of token from one chain to the other, instead of "exchanging" one kind to another. As shown in the graph, a certain number of tokens can be minted and used on one chain, and be burnt on the other to achieve a rebalance. 3. Multi-chain AMMs You all know , but can we apply the same idea to cross-chain transactions? has realized cross-chain liquidity pairs: you can see AMM pools consist of two or more different tokens from separate chains, and can "directly" swap your token to another kind on another chain. Uniswap zkLink 4. Intermediate Tokens The idea is similar to bridges as mentioned above, only that it realizes "swap" instead of merely "transport" your tokens from chain to chain. Basically, such a protocol helps swap your source token to an intermediate and further swap the latter to your target token. Most of the time the intermediate is the project's native token for the purpose of the right to mint/burn the intermediate to rebalance token amount. These are the four different approaches to realizing chain-to-chain transactions.
