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Bridges help form the concept of interoperability between blockchains in Web3. In other words, bridges enable the exchange of information from one blockchain to another, even when coded in different languages. The following guide outlines some of the cross-chain bridging solutions that are available for those wanting to move assets to and from NEAR.
This guide is aimed at NEAR users looking to experiment with different networks (i.e., Solana, Polygon, Arbitrum, etc.) where they may not necessarily hold assets, and is also directed at users from other networks potentially looking to bridge assets to NEAR.
Identifying User Flows
As with the classic blockchain trilemma that exists between security, scalability, and decentralisation, similar tradeoffs exist when using multi-chain bridges as well. These primarily occur between the four major factors that come into play when moving assets around, namely: safety, cost, speed, and ease of use.
These factors are determined by a range of different user flows. For example, here are some circ*mstances to consider before bridging any assets:
- Are you bridging between EVM and non-EVM compatible networks?
- Is your transfer reliant on a centralised exchange (CEX) or another centralised third-party? And are you comfortable with the tradeoffs that come with this?
- What type of tokens are you bridging (i.e., wrapped or native assets)?
- How long do you mind waiting for the transfer?
- Is the bridge you’re using secure? Has it been audited?
A Brief Note on Stablecoins
The recent addition of a USDT (Tether) NEP-141 token on NEAR has made bridging more accessible to those who don’t use USDC. Both ‘USDT.e’ and ‘USDC.e’ are the symbols chosen to denote ‘bridged USDT’ and ‘bridged USDC’.
NEAR users may have noticed this stablecoin symbol change already. No action is required if you currently are holding USDT or USDC bridged from Ethereum, as previously bridged USDT or USDC will be kept in wallets, with only the ticker changing.
Bridge Security
Since 2020, more than $2.5 billion USD has been stolen by hackers exploiting smart contract code and compromised private keys in cross-chain bridges. These exploits account for more than 50% of all exploited funds on DeFi. Statistically speaking this means that bridges are generally considered some of the riskiest infrastructure in DeFi. This leads us to our first bridging solution — allow us to introduce you to the Rainbow Bridge.
Rainbow Bridge
Created by the team at Aurora Labs, the Rainbow Bridge is a permissionless, trustless, decentralised bridgebetween Ethereum, NEAR, and Aurora. It’s one of the few cross-chain bridges that works without having to put any trust in third parties. In addition to its history of reliability, the Rainbow Bridge offers a fantastic user experience where connecting your ‘Transfer from’ wallet and your ‘Transfer to’ wallet is clear and intuitive. All the relevant information a user wants and needs appears at the proper time in the process.
The past year has shown that users bridging through Rainbow Bridge have access to one of the safest cross-chain solutions available in Web3. In August 20222, the Rainbow Bridge paid out the second biggest bug bounty in the world. Six million USD was transferred to a hacker who found a critical vulnerability in the existing code, while another attempt was thwarted in May. No user funds were lost during any of these events.
‘The tech that we are developing takes ten times longer than just the development time in order to make sure that our users are protected,’ Alex Shevchenko, CEO Aurora Labs, said in a podcast with ReadyLayerOne earlier this year.
With regards to speed, Ethereum-to-NEAR is faster and cheaper than NEAR-to-Ethereum because higher gas fees on Ethereum prohibit the relayer from updating at a high frequency. In the other direction, NEAR users benefit from its cheap, scalable technology by bridging to the chain. The Rainbow Bridge does not charge any fee past the required gas costs.
Key takeaway: Rainbow Bridge offers one of the safest, simplest, and easiest ways to bridge between NEAR, Ethereum, and Aurora. The only prerequisite is having ERC-20 or NEP-141 tokens to transfer to your wallet. Highly recommended.
Allbridge Classic
Allbridge is a simple to use and fast generalised proof-of-stake (PoS) bridge between Layer-1 and Layer-2 networks, as well as EVM and non-EVM compatible blockchains. It supports both native and wrapped token transfers. Because of its modular architecture, Allbridge is compatible with over 11 blockchains, so users have many options at their disposal when sending assets cross-chain — making flexibility and optionality key features. There is a 0.3% flat bridge fee when transferring.
Transparency-wise, Allbridge uses an on-chain validator consensus, meaning transactions can be tracked like other block explorers. The bridge functions using a lock-and-mint process through smart contracts between blockchains, and the project has been audited by premier cybersecurity firms Kudelski Security and Cossack Labs. A selection of these audits are published as case studies to showcase the effort Allbridge has made in assuring users of its commitment to security.
Most importantly, NEAR users sending assets to and from other blockchains via Allbridge can do so only through the $ABR token; consider $ABR as the vehicle you have to get into to cross the bridge from one ecosystem to another. The token is available to swap on ref.finance. And here is the full list of DEXs where you can trade your ABR to the native token of your choice. Finally, bridging from NEAR to Ethereum on Allbridge Classic did not take as many hours as advertised on some other bridges.
The user flow is as follows:
1) Swap for ABR on NEAR
2) Send ABR to blockchain of your choice
3) Receive ABR on other blockchain in a supported wallet
4) Proceed as you like, swapping to another token on the receiving blockchain (reverse process for moving an asset to NEAR).
Key takeaway : Allbridge is an intuitive option if you want to bridge directly between NEAR and a Layer-1 blockchain. Its biggest limitation is that it requires you to use $ABR as your mode of transportation.
Multichain
Previously called Anyswap, Multichain is a non-custodial, no-slippage bridge and cross-chain router that uses multi-party computation (MPC) to safely and securely transfer assets. Multichain is open-sourced, decentralised, and trustless; a group of secure MPC nodes exist separately from the blockchain and collectively sign transactions. Meanwhile, by sacrificing some speed from the computational resources consumed, MPC technology provides benefits in safety, ease of use, and privacy. This means that Multichain’s V3 Router infrastructure allows for assets to be bridged natively — rather than being wrapped. The bridge recently started supporting NEAR Protocol, and announced a full integration with Sender Wallet December, 2022.
There are some limitations on Multichain. For example, sending funds to an exchange or custodial wallet is not allowed. Moreover, the bridging requirements and fees result in relatively expensive transactions. For example, when routing to Ethereum, a 50 $USDC minimum transfer amount is established with the stablecoin, and there is a 40 $USDC minimum fee.
With that said, routing to other blockchains using Multichain can be less costly and the fee structure is made obvious right below the swapping terminal. The user interface (UI) clearly allows the user to pick from available tokens on the originating blockchain to their chosen token on a different blockchain and warnings are given in red font to ensure the user acts safely and mindfully.
Key takeaway : Multichain is an established bridging solution that offers a seamless way for users to send and receive assets both to and from NEAR and Aurora! It has by far the most token-for-token options available out of the 3 bridges. However, Multichain transfers are limited to non-custodial addresses and can demand a high minimum fee (for instance, $40+ USDC in the transfer shown above).
Conclusion
Interoperability sets the conditions for economic activity to spread from one blockchain to another. There is no proverbial “echo chamber” of being limited to one blockchain forever; cross-chain bridges truly allow DeFi users to explore other ecosystems, communities, and applications. As touched upon, tradeoffs still exist, however, cross-chain bridging is now a realistic option for many of us. DeFi users can also get creative with their bridging strategies by combining more than one bridge, rather than using one cross-chain bridge. For example, you could use two Layer-1 specific bridges — like the Rainbow Bridge for NEAR and the Avalanche Bridge for Avalanche — that intersect through the base layer of Ethereum. You might also use other bridges and aggregators like Synapse Protocol or Li.Fi to link to an EVM-compatible chain like Aurora, and then use Rainbow Bridge for the final trip home (the reverse also works).
If you find a way that solves the multi-chain bridging tradeoff between safety, cost, speed, and ease of use, tag us @NEARWEEK on Twitter with the #NEAR #DeFi #crosschain #multichain tags!
*The terms ‘cross-chain’ and ‘multi-chain’ are used interchangeably throughout this guide.
Written by Alex Wonnell
Edited by @achildhoodhero
About NEAR Protocol
NEAR is a dynamically sharded Proof-of-Stake, carbon-neutral blockchain built for usability and scalability. NEAR combines the power of both PoS and sharding in a technology called Nightshade, making the chain infinitely scalable without compromising security and decentralisation.
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