Imagine you have some Ethereum on the main network and you want to move it to Optimism, what you would do is send it to Binance and bring it back, paying withdrawal fees for each transaction. However, there is a solution between networks, the Bridges.
Cross-chain swaps are a mechanism that allows you to exchange tokens issued on one blockchain for tokens issued on another different blockchain.
Essentially, they are like bridges that allow interoperability between different blockchains, facilitating the exchange of assets and data between them.
How cross-chain swaps work:
Bridges between chains:
Bridges act as intermediaries, creating a "wrapped" or "encapsulated" token on the other blockchain that represents the original token.
Direct exchanges:
Some platforms also allow direct exchanges of tokens between chains without the need for wrapped tokens.
Native applications:
There are native cross-chain applications that simplify the process, allowing exchanges with a single click.
Interoperability:
Cross-chain swaps are crucial for interoperability, enabling applications to function seamlessly across different blockchains and share information and assets.
Do you use any cross-chain swap? 🤷