- Incrypted’s online marathon was attended by Andrey Velikiy
- He talked about what cross-chain protocols are and trends in this technology
- He also noted the potential of bridges in the field of cryptocurrency crowdfunding and donation gathering
The Incrypted Conference 2023 online marathon is gaining momentum. Our next guest is Andrei Velikiy, co-founder of the Allbridge project. His talk will focus on how to make bridging infrastructure more accessible to newcomers to the Web3.</nbsp;
“Today we will discuss what bridges are, how they are useful in principle, and how they can help collect cryptocurrency donations,” Great began.</nbsp;
Why are cross-chain protocols important to the industry? “We live in a multichain world. Many networks appear every day. That’s why we need a reliable method for transferring assets from one ecosystem to another,” the speaker emphasized.</nbsp;
Great also highlighted the following factors:
- bridges are necessary for “closer” familiarity with other projects like Arbitrum, zkSync, Aptos, etc;
- also these protocols are necessary for scaling dApps;
- and they create additional opportunities for finding new sources of liquidity.</nbsp;
What does this look like in practice?
Later, Great paid attention to the mechanism of how the cross-chain protocol works. It is built around the “mint-and-burn” principle. When assets are transferred to the second network, a similar number of “wrapped” tokens are created.
When they are withdrawn, they are burned, and the trader gets his funds back without the “w” prefix..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 But at the same time this concept, according to Veliky, is outdated.
Fractionalization of liquidity
What does Veliky mean by this concept? Here’s an example. When you tranche USDC into Solana through Allbridge, the trader receives “AllbridgeUSDC”. If he uses Wormhole, it will be a different token – “WormholeUSDC”.</nbsp;
This is where Great sees the main problem with “old generation” bridges.. In order to solve it, at least at this stage, Allbridge is focusing on UX.
How can bridges be made better?
According to Great, it can be done as follows:
- native cross-chain transactions. When transferring tokens, the user should receive regular “coins” rather than “wrapped” tokens. And Great mentions USDC in the examples for a reason, because newcomers use this very asset category for liquidity transfer;
- Most accessible user interface. Most features are available “one-click”;
- Messaging protocols to increase the number of integrated networks;
- Ready gas in asset transfer for newcomers;
- Promoting bridges beyond the EVM ecosystem of interoperable protocols.
Use cross-chain protocols for humanitarian purposes
Great believes that bridges have enormous 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 allows you to significantly expand the reach of the audience.. He talked about the recent Allbridge hack. You can find the squeeze at the link.