Different blockchains are completely different chains, although most of them are based on the Ethereum standard – ERC20. Let’s see if interaction between different chains is possible in this article.
To begin with, I would like to note that EVM-chains they work on a similar system, but can use different concepsus such as Proof-of-Stake or Proof-of-Work. By creating your wallet, you will automatically get access to your address in other EVM chains, and your private key will also be able to manage your address. The only difference is that transactions in another chain are processed by different validators and miners, that is, having received an incoming transfer in the ETH network – this will not be duplicated in the BNB network.
In order to send tokens from the ERC-20 network to the BEP-20 network, special bridges are required that will block your assets in one network and create a duplicate for you, collateralized by blocked assets in ETH network.
In other words, bridges perform two functions that should be quickly synchronized with each other – this is the storage and issuance of new tokens on another network. I would compare this situation to the Marvell multiverses, where each world exists in its own universe, but parallel to the general flow of time, and special abilities or devices are needed to move between worlds.
As mentioned earlier, bridges use a large number of contracts and pools when working, where either your assets are stored or new ones are printed depending on the amount of your transfer. When a user sends an ERC-20 token to the bridge custodian contract, it is locked on it until the bridge receives a reverse transfer. At this time in the BEP-20 network, we receive either the original asset (if possible) or the wrapped asset (a mirror copy of the original) from the bridge’s treasury contract. Perhaps you are already familiar with such assets as WETH or WBTC, the “W” at the beginning means that this is a wrapped copy of the original asset, and somewhere the original ETH or BTC itself is stored, which is stored as collateral.
Let’s look at this with the example of a real bridge Transferto.xyz, from the LiFi team:
The bridge itself can perform both the transfer and the exchange of your assets for others.
Here is the algorithm of actions for the transfer of ERC20 tokens to the BEP-20 network.
As you can see, this gap between different networks has long been overcome and at the moment you can find a solution to transfer your tokens from ERC20 to BEP20 format. This helps to maintain liquidity in the market and develop new chains due to the huge interest from web3 users.
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I'm Carina, a passionate crypto trader, analyst, and enthusiast. With years of experience in the thrilling world of cryptocurrency, I have dedicated my time to understanding the complexities and trends of this ever-evolving industry.
Through my expertise, I strive to empower individuals with the knowledge and tools they need to navigate the exciting realm of digital assets. Whether you're a seasoned investor or a curious beginner, I'm here to share valuable insights, practical tips, and comprehensive analyses to help you make informed decisions in the crypto space.