- Andrey the Great took part in the online marathon from Incrypted
- He spoke about what cross-chain protocols are and the development trends of this technology.
- He also noted the potential of bridges in the field of cryptocurrency crowdfunding and donation collection.
Online marathon within the Incrypted Conference 2023 is gaining momentum. Our next guest is Andrey Veliky, co-founder of the Allbridge project. During the presentation, he will focus on how to make the bridging infrastructure more accessible to newcomers to Web3.
“Today we will discuss what bridges are, what benefits they bring in principle, and how they can help in collecting cryptocurrency donations,” Veliky began his speech.
Why are cross-chain protocols important to the industry?
“We live in a multi-chain world. Many networks appear every day. That is why we need a reliable method for transferring assets from one ecosystem to another,” the speaker emphasized.
The Great also identified the following factors:
- bridges are needed for a “closer” acquaintance with other projects, for example, Arbitrum, zkSync, Aptos, etc.;
- also these protocols are necessary for scaling dApps;
- and they create additional opportunities to find new sources of liquidity.
What does it look like in practice?
Further, the Great paid attention to the mechanism of the cross-chain protocol. It is built around the mint-and-burn principle. When transferring assets in the second network, a similar number of “wrapped” tokens are created.
When withdrawing, they are burned, and the trader gets his funds back without the “w” prefix. This has its advantages, for example, the ability to “transfer” a huge amount of liquidity. But at the same time, this concept, according to the Great, is outdated.
Liquidity fractionation
What does the Great mean by this concept? Let’s take an example. When USDC is tranche to Solana through Allbridge, the trader receives “AllbridgeUSDC”. If he uses Wormhole, then it will be another token – “WormholeUSDC”.
It is in this that the Great sees the main problem of the “old generation” bridges. To address this, at least for now, Allbridge is focusing on UX.
How to make bridges better?
According to the Great, this can be done as follows:
- native cross-chain transactions. When transferring tokens, the user should receive regular “coins” and not “wrapped” ones. Moreover, the Great does not just mention USDC in the examples, since newcomers use this particular category of assets for liquidity transfer;
- the most accessible user interface. Most of the functions are available “in one click”;
- messaging protocols to increase the number of integrated networks;
- ready-made gas reserves for the transfer of assets for newcomers;
- popularization of bridges outside the ecosystem of EVM-compatible protocols.
Use of cross-chain protocols for humanitarian purposes
Veliky is sure that bridges have great potential in this area. They can act as a kind of analogue of mixers. In addition, the use of a cross-chain protocol for donations can significantly expand the reach of the audience. Recall that Andrei the Great was our guest on the stream. He talked about the recent Allbridge hack. You can find the squeeze at the link.