Decentralized Finance has come a long way from its initial beginnings when it was all about swaps on Ethereum; with it now being a large multi-chain landscape. Almost anything can be found on the blockchain now, from games to social networks and even sports betting. DeFi has exploded beyond the payment solution envisioned by Satoshi Nakamoto. One innovation we've seen in DeFi is the introduction of bridges, dapps that help facilitate multi-chain transactions or token transfers from chain to chain. Bridges solved an immediate problem facing DeFi: People could not move their money from one chain to another without going through a centralized exchange.

Before bridges, if I had $1000 USDT on BNB Chain and wanted to use it on Polygon, I'd have to first send it to a CEX like Binance, then resend it to my wallet via the Polygon address. DeFi was created to cut out the middleman, in this case, the CEX.

Bridges are smart contracts that operate as a middleman in the transfer of assets between various blockchains. They essentially join two chains together. These chains can be distinct Layer 1s (L1s)—for example, linking Bitcoin to Ethereum, Ethereum to Arbitrum via L1-L2, or Optimism to zkSync via L2-L2.

For L1-L1, if you want to transfer a token X from chain A to chain B, you'll first deposit token X into the bridge contract on A. This contract would communicate to a bridge contract on chain B and issue a derivative representing that deposited asset X, denoted as X’.

X → A bridge → B Bridge → X’

These bridges are the riskiest because you must trust the security of the L1 protocol, the integrity/competence of the bridge operators and the security of the second L1 protocol.

For cross-chain L2 bridges, they help different L2s connect to each other. They often share similar issues with liquidity. L2 bridges use the l1s as a path for asset migration. Assets are secured by the L1 and you only need to trust 1 l2 at a time.

There are factors to consider when looking for a good bridge to use. These factors are:

Cost: Will this break the bank?
Speed: How long to complete the transaction?
Security: How secure is the bridge? Will I get hacked?
Supported chains: Your favourite chain might not be supported by all bridges.
Supported assets: Some bridges won’t support all assets of a chain.
UX / UI. Some are so much nicer to use than others.
Additional incentives like airdrop points are also available.

There are many great bridges on various blockchains, but my favourite is the Rainbow Bridge on Near Blockchain. You should explore various bridges on different chains. It'll save you time and fees that would be spent going to and fro with a CEX