An overview of cross-chain bridges in DeFi

One of the prevailing challenges in decentralized finance (DeFi) is the fragmentation of liquidity across multiple blockchains that cannot natively interact with each other. A key example of this issue is the fact that Bitcoin is the largest cryptocurrency, but it cannot directly be used in DeFi protocols that have primarily been developed on the Ethereum network thus far. As a result, those who may wish to directly earn yield on Bitcoin through DeFi are unable to do so. 

On the basic DeFi app side, a lack of easily accessible liquidity for decentralized exchanges (DEXs) or lending platforms will also inevitably cause issues like high slippage or the inability to collateralize loans. Most decentralized apps (dApps) today are developed on the Ethereum blockchain and support ERC-20 standard tokens.