What Is a Crypto Bridge? Cross-Chain Transfers Explained

Imagine you have just bought some Ethereum. You hold it in your wallet and then see a new decentralised finance (DeFi) app or blockchain game that everyone is talking about.

The catch is that this new app runs on a different blockchain, such as Solana or Arbitrum. Because blockchains are separate networks with their own rules, your Ethereum cannot simply move across to the other network. It is stuck on its home chain.

To use that new app, you need a way to represent the value of your Ethereum on the other chain. That is what a crypto bridge is designed to help with, although using one is high risk and mistakes can be costly.

What is a blockchain bridge?

It can help to think of blockchains as isolated islands. The Bitcoin island has its own currency, rules, and economy. The Ethereum island is a different place, with its own currency and coding language.

For a long time, these islands had almost no way to talk to each other. A boat leaving Bitcoin island had nowhere to dock on Ethereum island.

A blockchain bridge acts like a ferry service or tunnel between these islands. It creates a communication channel that can let users transfer tokens, data, or smart contract instructions from one chain to another.

Without bridges, the crypto ecosystem would remain split into separate pockets of liquidity. To change networks, you might need to sell your Bitcoin for pounds, then use those pounds to buy Ethereum on an exchange. Bridges can make this process seem smoother and keep value inside the crypto ecosystem, but they introduce extra technical and security risks that you would not face if you simply held cash in a bank account.

How bridges work in practice

Under the surface, bridge technology is complex and can fail in unexpected ways. As of 2026, some newer systems have made the user interface simpler, but the underlying risks remain. It is useful to understand the three main mechanisms that bridges use to move value between chains.

1. The Lock and Mint model

One traditional approach is called the Lock and Mint mechanism. When you send a token across this type of bridge, the original coin does not physically move to the other chain.

• Locking: You deposit your asset (for example, Bitcoin) into a smart contract on the source chain. This contract acts like a vault.
• Verifying: The bridge protocol confirms that the funds are locked and that they cannot be spent while you hold the wrapped version.
• Minting: The bridge mints an equivalent amount of a "wrapped" token on the destination chain.

If you deposited Bitcoin, you might receive Wrapped Bitcoin (wBTC) on the Ethereum network. This wrapped token represents a claim on the original Bitcoin that remains in the vault.

When you want to move back, the wrapped token is burned (destroyed) and your original Bitcoin is released. If something goes wrong with the vault contract, or it is hacked, the wrapped tokens can lose their value and your original coins may be lost.

Note: While wBTC is a well-known example of this model, it specifically relies on centralised custodians to manage the locked Bitcoin, which adds an additional trust layer. Not all Lock and Mint bridges use this centralised approach. Some use decentralised smart contracts or validator networks instead.

2. The Burn and Mint model

A different approach, used by some stablecoin issuers such as Circle, is the Burn and Mint model.

Instead of parking funds in a central vault, the token on the source chain is permanently burned. The issuer then mints a new, native token on the destination chain. This reduces the amount of value sitting in a single pool, which can lower some hacking risks.

However, this model still relies on the issuer, their systems and their smart contracts. If the issuer has operational problems, legal issues, or technical failures, users can still lose access to their funds or see the token price move away from the intended peg.

3. Intent-based bridges (the modern standard)

More recent bridge designs use what is called intent-based architecture. Rather than forcing users to manage several complex transactions, these bridges let you simply specify the outcome you want.

For example, you might state: "Send 100 USDC from Ethereum to Arbitrum."

Behind the scenes, a network of specialised agents called solvers competes to fulfil your request. These solvers use their own capital to send the funds to you on the destination chain, usually very quickly. They are later reimbursed by the protocol. This method is often faster and can be cheaper than some older models.Some bridge aggregators now incorporate intent-based routing automatically.

That speed comes with trade-offs. You are now relying on a more complex system of actors and incentives, which can fail under stress or be attacked. If solvers stop participating, or if the protocol has a bug, your transfer might be delayed or fail, and you could lose money on fees or even your full balance.

Why use a bridge?

People do not usually use bridges just to move money for the sake of it. They tend to use them to reach tools and services that are only available on other networks. There are three common reasons.

Remember that all of these potential benefits sit alongside significant risks. Bridged assets are often more exposed to smart contract bugs and hacks, which can result in permanent loss of funds, than assets held on a single, well known network.

Lower transaction fees

Some major blockchains can become expensive during busy periods. Users may bridge their assets to Layer 2 networks or alternative chains where transaction fees are lower. This can make smaller trades or frequent interactions more affordable.

However, saving a few pounds on transaction fees is not much use if a bridge fails and you lose your full balance. Before chasing lower fees, you should consider whether the extra complexity and risk is worth it for the size of your holdings.

Speed

Traders sometimes bridge assets to high speed networks so they can enter and exit positions more quickly. Gamers do the same so their in game moves are processed faster and feel smoother.

That extra speed can come at a cost. Faster and newer networks may be less battle tested. If they suffer an outage or exploit, your ability to move or sell your assets can be affected, especially if you rely on a single bridge.

Access to exclusive apps

Many decentralised applications (dApps) only run on specific blockchains. For example, you might want to play a game that exists only on a particular side chain, or use a lending platform built on Avalanche.

A bridge lets you move your funds to the network that hosts the app. In doing so, you take on the combined risks of that app, the destination chain and the bridge itself. If any of these fails, your funds could be at risk of a total loss.

Real life examples

Here are some common bridge related projects and concepts you might come across. These are examples, not recommendations or endorsements, and using any of them involves the risk of losing money.

Wrapped Bitcoin (wBTC)

Wrapped Bitcoin is a well known example of the Lock and Mint model. Bitcoin does not natively support complex smart contracts. By bridging Bitcoin to Ethereum, users receive wBTC, an ERC 20 token that can interact with Ethereum based lending apps or decentralised exchanges.

This flexibility comes with extra risk compared with simply holding Bitcoin on its own network or in cash. If the smart contracts or custodians that manage wBTC fail or are hacked, the wrapped tokens may lose their value and holders can be left with little or no recourse.

Circle's Cross Chain Transfer Protocol (CCTP)

Circle's Cross Chain Transfer Protocol (CCTP) uses the Burn and Mint model to move USDC (a US dollar stablecoin) between blockchains. Instead of receiving a wrapped version of USDC, the user receives native USDC on the destination chain.

The launch of CCTP V2 in 2025 introduced "Hooks". These let users transfer funds and carry out another action, such as a trade, in a single step. While this can improve user experience, it also means that more things are happening automatically in the background. If something goes wrong at any stage, you may find it harder to understand what happened or to recover your funds.

Bridge aggregators

Instead of choosing a single bridge manually, many users now rely on aggregators such as Li.Fi, Bungee or Jumper. These platforms automatically compare routes across many bridges at once. They then select an option based on factors such as speed, cost and their own view of security for your specific transaction.

This is similar to how a travel comparison site finds a flight. As with travel sites, you are adding another layer of complexity and another party to rely on. If the aggregator routes you through a weak or compromised bridge, you can still lose your money, even if the interface looked simple and convenient.

Risks and red flags

Bridges can be very useful, but they also come with extra risk. In fact, bridge-related hacks have made up a large share of total crypto losses in past years. In terms of crypto hacks, Q1 2025 was unfortunately the worst quarter on record. with Immunefi estimating US$1.64 billion lost.

Bridges can be powerful tools for moving value, but they are also some of the riskiest parts of the crypto market. Historically, bridge related hacks have accounted for a large share of all recorded crypto losses.

You should only bridge funds that you can afford to lose completely. Below are some of the main issues to watch for.

The honeypot risk

In the traditional Lock and Mint model, the bridge smart contract often holds a large reserve of cryptocurrency. This creates a single, attractive target for attackers.

If an attacker finds a bug in the smart contract and drains the vault, the wrapped tokens on the other side of the bridge can become worthless. There may be little or no insurance, compensation, or legal protection if this happens, and you might not be able to recover any of your loss.

De pegging

Wrapped tokens are usually designed to track the value of the original asset at a 1:1 rate. For example, 1 wBTC is meant to be worth 1 BTC.

If a bridge loses user confidence or suffers a security breach, the market price of the wrapped token can "de peg" and fall below the value of the underlying asset. In extreme cases, the price can collapse almost to zero. Trying to exit during a de pegging event can be difficult, as liquidity may disappear or fees can rise sharply.

Smart contract vulnerabilities

Bridges rely fully on code and on-chain logic. If the code that manages deposits and withdrawals has a flaw, funds can be frozen or lost permanently.

Before using a bridge, it is sensible to check whether the protocol has been audited by reputable security firms, whether those audits are recent, and how long the bridge has operated without a major incident. Even audited code can still fail, so an audit should not be treated as a guarantee of safety.

You should also be cautious of very high rewards, aggressive marketing, or unclear documentation. These can be signs that the risks are not being presented fairly.

The future of multichain

The crypto industry is gradually moving toward a future where "bridging" becomes less visible to users. This idea is sometimes referred to as chain abstraction.

Potentially, you would simply use an application and your wallet or the protocol would handle any cross chain transfers in the background. You would not need to know which blockchain you are currently using, similar to how you do not need to know which server hosts your email.

Developments such as intent based architecture and advanced aggregators are steps in this direction. They may make things feel smoother, but they also increase the number of hidden systems you are relying on.

Until that future arrives, and probably even after it, understanding how bridges work and what can go wrong is essential if you choose to use them. Crypto assets are high risk and highly volatile, and bridging adds further layers of technical and operational risk.