Next DeFi Trends
Cross chain technology aims to solve the problem of not being able to trade across different blockchain platforms. Currently, developers are working on two types of crypto bridges. The first type is called a trusted bridge, which involves a central authority that transfers native coins or tokens between blockchains. The second type is called a trustless bridge, which uses smart contracts and trading algorithms to facilitate cross chain transfers.
Both types of bridges come with inherent risks. Trusted bridges involve sending money to a third party, which can be subject to censorship or scams leading to losses. On the other hand, trustless bridges require flawless smart contracts and code to prevent hackers from exploiting vulnerabilities. Despite these risks, both technologies are emerging and can be used judiciously. As they become more widely adopted in the crypto market, their use will become more commonplace.
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