Blockchain technology is gradually taking over the world as we switch from traditional centralized finance to decentralized finance. Thanks to cryptocurrency and other digital assets, individuals, companies, and governments are slowly integrating blockchain technology into their daily operations.
In finance, one of the significant challenges we face is the high level of interference by intermediaries. Centralized finance represents a slow and inefficient system with a higher cost of operations and significant risks. On the other hand, decentralized finance thrives well with the help of blockchain technology.
DeFi stands out from CeFi for the following reasons:
- Elimination of bank charges.
- Better security of your funds through a digital wallet.
- Easy access to financial services.
- Fast transactions.
Furthermore, DeFi wants to replace traditional institutions with blockchain technology. This development will ensure that blockchain will play a big part in handling financial transactions transparently and effectively.
Hence, investors can transact with one another without the help of the banks and stock exchanges. With the use of smart contracts, the blockchain can replace intermediaries.
Blockchain bridges and how it works
A blockchain bridge links two or more separate blockchains together like a physical bridge connecting one end of the road to another. Therefore, when you want to transfer your digital assets from one blockchain to another, a bridge ensures that your transactions are successful.
A blockchain bridge, also called a cross-chain bridge, connects two or more individual blockchains and verifies crypto transactions between them. Both chains can have different protocols, rules and governance models, but the bridge provides an easy way to interact securely on both sides. In addition, you do not need a crypto exchange to convert your crypto assets because the bridge performs that function.
How does the blockchain bridge work?
Unlike crypto exchange platforms that can compromise the complete ownership of your assets and your personal information when converting your funds from one cryptocurrency to another, a blockchain bridge can allow you to send and receive crypto from another chain with ease.
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Cross-chain bridges achieve this by exchanging information remotely through unidirectional bridges. For instance, Bitcoin and Ethereum are the two largest cryptocurrency networks and have vastly different rules and protocols.
As a Bitcoin owner, you can use a blockchain bridge to transfer your BTC to Ethereum and use them as you want because the ETH blockchain rule now guides your BTC. Consequently, you would be able to purchase various Ethereum tokens or make low-fee payments.
Benefits of Blockchain Bridges
The benefits of blockchain bridges include the following:
- Easy transfer of assets.
- Enabling cross-chain collateral.
- Supporting greater scalability.
- Efficient transaction processes between blockchains.
Glitter Finance Can Create Opportunities for Future Development on Algorand and Solana
Glitter is a brand-changing innovator bridge that seamlessly connects the everyday user to the crypto world. In addition, the DeFi protocol provides a smooth way through current technical and psychological barriers by providing user-friendly, streamlined architecture so that users can enjoy investing and surfing the crypto wave.
The primary mission of the protocol is to make DeFi more accessible to the public with easy, approachable and streamlined features. GLitter also uses technology to create easy movement in the ecosystem so that no one feels isolated.
Furthermore, Glitter Finance has launched a bridge on testnet from Solana to Algorand, and it is looking to establish a cross-bridge between three other ecosystems, Cudos, Cosmos, and Polygon.
Algorand has superior technology, and it has no downtime. Additionally, the blockchain has one of the best speeds and securities. Hence, Algorand is best suited to be the base of the cross-chain bridge with other blockchain networks. Solana is one of the most innovative DeFi ecosystems, and Polygon remains one of the networks that streamlines Ethereum. In addition, Cudos has an exciting new tech coming out of the UK. The combination of these blockchains creates a deep and unique ecosystem around the Glitter Finance bridge.
Blockchain bridge provides a way to improve the use and adoption of digital assets among relevant players, including individuals, businesses and government. Hence, Glitter Finance’s partnership with Algorand and Solana, two of the world’s most extensive blockchain networks, can create one of the best-decentralized operations that can be easily accessible worldwide.
First published on the Glitter Finance Medium