Deep Dive Into Blockchain Bridges

TLDR:

• Blockchain bridges are essential to building an interoperable, inclusive, open, decentralized blockchain ecosystem.
• A Bridge is a type of decentralized application that enables the transfer of assets from one blockchain to another.
• Presto is a powerful RaaS platform that prioritizes speed and performance, allowing users to deploy rollups in just a few minutes and clicks.
• Each Presto L2 comes with a pre-built bridge to the rootchain (L1), protected by zk proofs.
• With Presto, Gateway is abstracting the complexity of managing blockchain systems with next-gen infrastructure and tooling. This instant private zk-rollup lets users choose between the Gnosis chain and Ethereum as their Layer-1 for zkEVM, enabling gasless transactions and instant transaction confirmations.

In this post, we want to cover the following:

• Blockchain Bridges
• How do Bridges work? Types and Use Cases
• Why Bridges are Necessary in Web3
• What are the key Presto Features?
• How Presto Enhances the Security of Bridges with Zero-Knowledge Proofs

Understanding Bridges

What is a Blockchain Bridge?

A blockchain bridge is a technology that connects multiple blockchain networks, facilitating the smooth transfer of assets or data between them. It acts as an interoperability solution, ensuring seamless communication, asset, and data transfer across various blockchains.

The primary purpose of a blockchain bridge is to facilitate interoperability and enable the seamless transfer of assets or information across different blockchain platforms. It helps overcome the limitations of isolated blockchains and opens up opportunities for cross-chain transactions and collaborations.

To establish a blockchain bridge, a combination of smart contracts, validators, and other mechanisms are employed to lock assets on one blockchain and issue corresponding assets or representations on another. This innovative approach empowers users to move assets or data freely between diverse blockchain networks, creating exciting possibilities for cross-chain applications, services, and use cases.

How Do Bridges Work?

Bridges work by enabling the smooth transfer of assets and data between different blockchains. They facilitate the interaction of smart contracts or protocols across multiple blockchains, ensuring improved transparency, security, and interoperability. There are different ways bridges operate, each with its own straightforward and easily understandable method.

One of these methods is the lock and mint bridge, which involves locking the tokens on chain A and minting new tokens on chain B at a 1-to-1 ratio. The user who bridges the tokens can retrieve their original tokens on chain A whenever they want. When the user redeems their tokens back on chain A, the tokens on chain B are sent to a burn address.

Another similar method is the burn and mint bridge, which follows a similar process to lock and mint bridges but with one key difference — it is non-reversible. Upon bridging the tokens, the original tokens on chain A are sent to a burn address, and new tokens are issued on chain B. If a user wishes to bridge the tokens back to chain A, they must go through another round of the burn and mint process.

Visualization of how blockchain bridges work

There are two methods bridges utilize in asset transfer:

• Wrapped Asset Method

Blockchain Bridges provides a wide range of use cases. Instead of selling Bitcoin before converting it to Ethereum, blockchain bridges secure the BTC and generate Wrapped Bitcoin (WBTC) with equal value. This WBTC is then locked and transformed into an ERC20 token that can be used on Ethereum networks. The Bitcoin to be transferred gets locked within a smart contract, while the corresponding tokens are created on the target blockchain network.

• Liquidity Pool Method

The Liquidity Pools provide a way to add liquidity in any supported token without the need for synchronization or partnership with a project or even granting token minting permission to the bridge contract.

Most existing bridges have a significant limitation in that they cannot directly transfer native assets between different chains. Instead, they depend on the usage of a wrapped or “intermediate” token to facilitate the bridging procedure. However, this method proves to be highly inefficient and burdensome for users, thereby hindering their overall experience.

Let’s say a user wants to bridge 10 WETH from Polygon to ETH on Ethereum. The Cross Chain Bridge will utilize funds from its liquidity pool to provide the user with ETH on the Destination chain.

Why are Bridges Necessary in Web3? Significance of Bridges

Bridges enhance interoperability beyond the transfer of tokens and data, allowing for fast and low-cost transactions and allowing dApps access to execute transactions across multiple platforms.

• Enhanced User Experience — Bridges that are designed to handle high transaction volumes offer enhanced scalability, allowing developers and users to retain the liquidity and network effect of the original chains without any compromises.
• Collaboration and Innovation — The existence of bridges fosters cooperation among developers coming from various blockchain ecosystems. This collaboration sets the stage for the development of fresh platforms that capitalize on the advantages of multiple chains. By combining their knowledge, developers can create groundbreaking solutions that tackle the shortcomings of individual blockchains, ultimately benefiting the entire blockchain community.
• Maximum Liquidity for dApps — Bridges grant dApp developers access to liquidity available on different chains. Users can utilize these applications to transfer funds across different blockchains, facilitating the movement of value between multiple platforms.

Types of Bridges

In general, bridges can be classified into two categories based on how they work:

• Trusted Bridges — Trusted bridges, such as Binance Bridge, are cross-chain protocols that operate under the control of a centralized entity. When using these bridges, users transfer the control of their assets to the centralized authority. It requires a certain level of trust in the integrity and efficiency of this centralized entity to ensure smooth transactions. Trusted bridges like Binance Bridge are known for prioritizing speed and lower gas fees rather than focusing solely on cross-chain security.

• Trustless Bridges — Trustless bridges, also known as decentralized bridges, operate through machine algorithms such as smart contracts. These bridges function similarly to actual blockchains, involving multiple networks to verify transactions. By utilizing trustless bridges, users can enjoy enhanced security and increased flexibility when it comes to transferring cryptocurrencies.

Risk of Using Blockchain Bridges

It is important to note that composability between smart contracts on different blockchains can only be achieved by making inherent trade-offs in security, trust assumptions, or configuration flexibility. However, these trade-offs are usually not necessary for composability between smart contracts on the same chain.

• Bridge Attacks — One type of attack is called flooding where an attacker overwhelms the system with transaction requests to disrupt its functioning. Another type is parameter manipulation attacks where an attacker alters the bridge parameters either for executing fraudulent transactions or gaining unauthorized access to the system.

There are a few key factors to consider when securing a bridge. These include evaluating the cost of an attack and determining how many participants would need to be bribed to compromise its security.

• Validator Unresponsiveness — If many validator nodes go offline, the bridge connecting them will slow down or even stop working altogether. To motivate validators in such situations, some bridges offer rewards in their native tokens. However, this approach can have unintended consequences similar to yield farming: as users cash out their rewards, the token’s price falls, which in turn affects the general trust in the bridge project itself.
• Theft of Funds — Validators might be required to provide collateral, which can be seized in the event of any misconduct. However, there is a potential drawback if the collateral is stored in the bridge protocol’s native tokens. In such a scenario, there is an added risk that the value of these tokens might plummet. This could potentially tempt someone to take advantage of this situation by appropriating the more valuable deposits in ETH or AVAX.

Benefits of Blockchain Bridges

Blockchain Bridges offer a key advantage in terms of interoperability. They facilitate the exchange of tokens, assets, and data between different blockchains, layer 1 protocols, or sidechains. By embracing interoperable bridges, we can enter an exciting era where we have seamless access to the multitude of decentralized applications (dApps).

Now, let’s explore the fascinating recent advancements in zero-knowledge-proof (ZKP) technologies. These developments have a specific goal of reducing risk factors and solving bridge trilemmas. They bring forth various features that are beneficial for bridge design.

• Use of zk-SNARK technology — The correctness of block headers on source and destination blockchains can be proven, without relying on external trust assumptions. This ensures that the light-client protocols used are secure, and there are true nodes in the relay network.

Other benefits include Asset Diversification and improved market access. The Permissionless and decentralized nature of bridges’ relay network helps in eliminating the need for PoS-style or similar validation schemes.

Introducing Presto

What is Presto?

Presto, an advanced platform tailored for Web3 applications, is a state-of-the-art solution that empowers developers to effortlessly deploy their own zkEVM Rollup. This powerful scaling solution can be deployed on either the Ethereum network or the Gnosis Chain.

Presto simplifies the integration of the L2 layer into blockchain applications without requiring deep expertise in cryptography or advanced devops skills. It also streamlines network creation and maintenance for businesses adopting blockchain technology. With automated monitoring features, Presto ensures reliable performance and user experience with minimal downtime or disruptions in blockchain infrastructure implementation.

In summary, Presto is an incredibly powerful and versatile platform that empowers developers to effortlessly deploy their own zkEVM Rollup/Validium on either Ethereum or Gnosis Chain. By doing so, it unlocks the full potential of Web3 applications.

How does it work — Why do we need bridges?

The Presto L2 ecosystem is a remarkable example of how integration and security can work hand in hand. Each module of Presto L2 is designed with a built-in connection to the rootchain, which is the foundational/L1 layer. This connection ensures a harmonious relationship between the different layers. It acts as a pathway for fast transactions and smooth operations, enabling seamless movement between layers while keeping the rootchain’s integrity and security intact.

Blockchain bridges play a pivotal role in enhancing scalability and security, enabling the development of applications capable of seamless communication across various blockchain networks. It leverages a sophisticated network of relay nodes and smart contracts to ensure smooth and efficient communication between these networks.

Benefits of using Presto to Deploy your zkEVM Rollup

By utilizing Presto, developers gain access to a wide range of tools and functionalities that significantly streamline the deployment process.

Enhanced Scalability — The implementation of ZkEVM by Presto is a game-changer in the world of blockchain technology. It greatly enhances transaction processing speed, resulting in reduced costs and resource consumption. This not only improves the overall efficiency but also contributes to a more environmentally friendly approach.

Reduced Transaction Costs — The gasless rollup feature provided by zkEVM implementation in Presto is an essential tool for blockchain projects and developers, enabling them to create cost-effective and user-friendly applications. The transactions are sent in batches to L1 and this reduces cost in deploying rollups. This level of flexibility can greatly encourage innovation in the blockchain industry, leading to the development of more accessible and economically viable decentralized solutions.

Improved Speed — Presto provides fast deployment in just a few minutes and clicks. This is made possible by Gateway.fm competent engineers, who handle all the deployment and monitoring of the system.

Enable Gasless Transactions — Presto provides a feature that allows Rollup owners to prioritize user convenience by taking care of the gas fees on Layer 1. As a result, users don’t have to worry about transaction costs, making the blockchain experience smoother and more accessible for everyone involved.

Conclusion

Bridges play a vital role in introducing users to Ethereum L2s and also for those who wish to navigate various ecosystems. Nevertheless, considering the potential risks associated with using bridges, users must comprehend the compromises these bridges make.

Presto offers developers and enterprises a seamless integration of this privacy layer into their blockchain applications by abstracting away the intricate details like cryptography and advanced devops skills.

What’s Next?

We will have more to share soon about our roadmap and plans with Presto on our way to demystifying the complexities behind deploying custom zkEVM Rollup. As a sneak peek, in the coming weeks, we will publish more explainer guides like this on our work. Follow us on Twitter and join our community on Discord for the latest updates.

In the meantime, start building with Presto today using our developer docs. If you have an idea you’d like to discuss, fFeel free to reach out to us, and let’s work together to build amazing zkRollups using zkEVM technology. We are excited to see what you will build!