“The institutional and the corporate partners that we’ve dealt with really wanted this security,” said Sid Powell, CEO of Maple Finance. As security and performance of decentralized bridges get better, more people will likely begin to use them, he said, noting that Maple is considering expanding onto other networks, like Avalanche.
Going onto different blockchains can require extensive rewriting of code for an app, though it can offer a lot of benefits. Crypto apps can potentially grow faster if usage of the underlying blockchain balloons.
“The primary and most prevalent reason is to tap different consumer bases,” said Bodhi Pinkner, a portfolio manager at Arca, a digital-asset management firm. “You can increase your user base theoretically. It would reduce the needs for bridging if you assume every application is deployed cross chain on every chain.”
Still, bridges won’t be disappearing anytime soon. With more than 18,800 tokens, and thousands of blockchains, they are necessary for heavy users like Arca.
“People are becoming more conscious of the bridges they use,” Pinkner said in an interview. “But the need to bridge is so large that avoiding them for someone like us is not an option.”
-With assistance from Yue Qiu.
This article was provided by Bloomberg News.