Bridge Activity on Ethereum
With the increasing number of EVM chains (three recently announced Etherscan-built explorers!), more of a spotlight should be shone on activity in the addresses bridging Ethereum with them.
In last month’s article, we touched briefly on it. This month we take it further, exploring:
- Balance held by the respective bridges
- Deposits and withdrawals on each bridge
- Breakdown of bridged tokens
To analyze the data we first had to find the relevant bridges. 36 addresses used to bridge Ethereum with 21 chains were identified under the Etherscan Bridge label. If you’re aware of others, please share them with us!
Balance Held
The first thing that strikes you when looking at data to do with bridges is the overwhelming presence of Polygon.
Making up 90% of total value held in these bridges, their POS (Proof of Stake) and Plasma bridges hold $6.4 billion and $700 million respectively.
As Polygon overshadows every other bridge, it’s worth zooming into the breakdown excluding it. Here we see a more balanced distribution across the remaining 10% of total balance, with the six next biggest chains within an $85 million range of each other.
Interestingly, only 3 out of the top 10 bridges are connected to a Layer 2 chain. In total Layer 2 makes up only 12% of total value held. This may change however with the upcoming launch of composable Optimistic Rollup chains.
Deposits & Withdrawals
Note: for this analysis we excluded deposits and withdrawals from certain Polygon and Loopring bridges due to double-counting (transfers with each other). This affects the charts for both chains, but doesn’t change the written analysis below.
May saw a dramatic rise in action for bridges on Ethereum, hitting its peak by a considerable distance. A total of $9.5 billion in inflow and $5 billion in outflow occurred, primarily driven by Polygon. At its current pace, activity in June will not match that of May, which tallies with the overall lower market value of cryptocurrencies and lower gas prices.
After excluding Polygon, we can see a more measured rate of growth across the first five months of 2021. The deposits and withdrawals for other chains also cancel each other out, compared to a net inflow for Polygon.
The stand out from the rest was Fantom, showing a similar boom to Polygon in May activity. It had the 2nd highest activity while having only the 6th-most value held in bridges connecting to their chain.
Bridged Tokens
Taking our lens to tokens instead of chains, we unsurprisingly see ETH held the most by bridges. Stablecoins (USDC, USDT, DAI) and WBTC joining it at the top is also to be expected.
Polygon’s large impact on the numbers is also noticeable with tokens popular in their ecosystem (MATIC, QUICK, AAVE, DFYN, EMON) rounding off the top 10.
Excluding Polygon numbers again brings up interesting insights. Almost the entirety of USDC’s $1.57 billion bridged is held in Polygon, without which it falls below USDT in the pecking order. The Polygon tokens disappear from view while WETH (in Avalanche), LRC (in Loopring) and BLOC (in Solana) appear at the top.
Activity in bridges do not necessarily denote the full inflow and outflow to other chains (BSC and Solana for example gets most of their flow from exchanges like Binance and FTX), but they do make up a large portion of value held within Ethereum.
In fact, the total $8 billion held in these bridges would count for #4 in TVL (Total Value Locked) compared to DeFi platforms based on Defi Llama.
As we progress towards a multi-chain universe, expect the amount of activity on bridges to grow even more!
