January Cross-Chain Bridge Recap

Cross-chain bridges have grown to become an integral part of blockchain infrastructure in recent years, enabling asset interoperability and ease of capital transfer between otherwise disparate and siloed blockchains. Bridges are found between all layers of the blockchain stack and can serve as valuable indicators of emerging financial activity on particular chains. In this piece, we take a closer look at some of the key trends among cross-chain bridges in the first few weeks of 2023 thus far. 

As we mentioned in our 2022 review of cross-chain bridges, we will consider two broad categories of bridge protocols: multi-chain bridges and two-chain bridges. Multi-chain bridges support multiple blockchains, meaning that users can typically transfer assets between any combination of the supported chains. On the other hand, two-chain bridges provide a bi-directional channel between only two chains, and are often deployed as the canonical bridge between Ethereum and another L1 or L2. Examples include the Arbitrum One bridge and the Avalanche bridge.