Disclaimer: this article is part of our DeFi Honeypot column. It aims at providing entry-level knowledge on Decentralized Finance (DeFi) topics for information only. It is not intended, and should not be understood or constructed as financial advice. All investment activities should be carried out with caution and at your own risk.
Hey what’s up bee fans! Enjoying Shimmer EVM testnet so far?! Then we also have a fresh good news for you: Iotabee testnet version has just integrated IOTAMPC bridge and will soon be open for testing!
But WAIT,
what is a bridge?
Why should I be interested??
And more importantly, how & when???
No worries, we get everything covered! Come!
What is a Bridge?
In Decentralized Finance (DeFi) and crypto, a “bridge” is a platform or protocol that enables the transfer of digital assets between two different networks. For example, a bridge could allow for the transfer of tokens from the Ethereum blockchain to the Binance Smart Chain, or to Shimmer EVM, or from the IOTA mainnet to the Shimmer EVM network.
Why using a bridge?
One of the main reasons why we may want to use a bridge is to enable cross-chain interoperability. Different chains may have their own unique features, advantages, and disadvantages, and bridging allows users to access and take advantage of these different networks without needing to switch between them manually.
How to use a bridge?
To use a bridge, a user would typically need to “wrap” their asset on one chain by locking it up in a smart contract and issuing a corresponding “wrapped” token that can be transferred to the other chain. Once the wrapped token reaches the destination chain, it can then be “unwrapped” by burning the token and releasing the underlying asset from the smart contract.
For example, if a user wanted to transfer ETH from the Ethereum network to Shimmer EVM, they would first need to wrap their ETH in a smart contract on the Ethereum network and receive an equivalent amount of wrapped Ether (WETH) tokens. They could then transfer the WETH tokens to the Shimmer EVM using a bridge, where they could then be “unwrapped” to receive the original ETH on the Shimmer EVM.
Sounds a bit complicated? Not at all on Iotabee!
Iotabee has already integrated IOTAMPC and it will be available for testing on the Shimmer EVM testnet starting from later this week (YES! w/c April 10, 2023) . You may access the testnet version on earlybee.iotabee.com.
With the bridge integrated on Iotabee, wrapping and unwrapping assets can be done as easily as a simple swap transaction.
Once it’s live on Iotabee testnet version, you can test:
Excited?
A start guide will be released soon to get you prepared! Stay tuned and keep following us for more exciting features and deliverables like this!
We’ll see you very soon on Iotabee!
Additional reading:
Possible use cases of a bridge:
- Liquidity provision: Bridges enable users to move liquidity between different networks, which can help to increase the overall liquidity available in DeFi and crypto.
- Asset diversification: By using a bridge to move assets between different networks, users can diversify their holdings and take advantage of the unique features and opportunities offered by each network.
- Arbitrage: Bridges allow users to take advantage of price discrepancies between different networks by buying assets on one network and selling them on another.
- Yield farming: By moving assets between different DeFi protocols on different networks, users can participate in yield farming strategies and earn passive income from their holdings.
- Access to new opportunities: Bridges enable users to access new opportunities and use cases that may not be available on their native blockchain, such as borrowing and lending, staking, and trading.
