Coinbase recently shared its expert views on the state of bridging in 2024. The official post by Coinbase read that bridges have become a pivotal infrastructure for service providers, users, and protocols.
There are three types of bridges primarily being used in the market: Bridge Aggregators, Native Bridges, and Third-Party Bridges.
- Native bridges are the canonical contracts that users interact with to deposit or withdraw assets.
- Third-party bridges are validators or networks that stay between chains as middlemen.
- Bridge aggregators integrate the two bridges and offer the best possible route across bridges.
The primary use case for bridges continues to be asset transfers. For example, if there is an asset (BTC) on Chain 1 that isn’t natively issued on Chain 2, bridges can send the asset between the chains.
Similarly, bridges can be used to send tokens between chains and execute a swap. Other than this, bridges can be used for multisig ownership or governance.
The market status of a bridge is assessed based on its on-chain AUC or TVL as a sign of usage. The success of Native Bridges is tied to the usage of Layer 2 itself.
Third-party bridges base their success on TVL, chain coverage, and volume. Similarly, Bridge Aggregators route transactions; thus, their volume metric is a standard benchmark.
Several factors differentiate the bridges based on their distribution and use cases. Some of these aspects are:
- Smart contracts
- Security
- Multisig
- PoS Chain
- Distribution
- Relayer + Oracle
- Wallets
- dApps
- B2C Front-Ends
- EVM
- Ecosystem
According to the data of Coinbase, bridges will find usage as long as the number of chains and the demand for UX abstraction rise. However, oracles and bridges will eventually compete with each other for the rights to data issuance.
Interoperability will remain a top trend in an environment where the chains will continue to grow. Even Coinbase is investing in use cases that emerge from bridging and will do so in the future as well.
Source: https://www.cryptonewsz.com/coinbase-shares-expert-views-on-the-state-of-bridging-in-2024/