Key Insights:
- Users are able to securely bridge their crypto using official bridges or secure wallets for full control.
- Testing transfers with small amounts ensures a successful cross-chain transaction and visibility of tokens in destination wallets.
- Centralized exchanges provide a streamlined way to bridge cryptocurrencies while also supporting various blockchain systems.
Bridging cryptos safely entails adequate preparation as well as the use of reliable tools. This guide will outline the step-by-step procedures involved in moving cryptos between different blockchains without losing money, which are appropriate for both novice and advanced crypto traders.
What Is a Crypto Bridge?
Crypto bridges are mechanisms used to enable the transfer of value (tokens) between various blockchain protocols. Because there is no direct way for protocols to communicate with each other, bridges serve as a means to facilitate these types of transactions.
This process will typically entail locking or burning a token on the source chain, then minting or releasing a token that represents the original on the new chain as a wrapped version of that token.
For example, when you send $USDC from Ethereum to Arbitrum, it is really transferring $USDC that can now be used on Arbitrum (not the original $USDC on Ethereum).
To have any chance at bridging your digital assets safely, if you don’t understand how the bridge process works, then it is likely that you will fall victim to loss of assets or mismanagement of funds.
Choosing Trusted Bridge Tools
One of the first steps to securely bridging cryptocurrency across different networks is using recognized bridge protocols.
Well-known bridges that have undergone independent audits and are used regularly include the Arbitrum Bridge and Polygon Bridge, whereas older cross-chain bridges should be trusted based on their successful track records.
Whenever you are using a bridge, you should always access the URL by going directly to the official website. You should not use links from social media advertisements, random emails, or any other unverified or unknown source.
Therefore, you may want to create bookmarks for your safe and trusted bridge websites, this way you can easily access these bridges again in the future while reducing your chance of being the victim of a phishing attack.
Only use verified platforms to trade your cryptocurrency between blockchains if you want to ensure that your transaction is safe and secure.
Preparing Wallets and Tokens
To perform a transfer, you must first verify that your wallets are supported by both chain types being transferred. For instance, an example would be using a EVM compatible wallet of MetaMask, which supports multiple chains, but it may not be supported by a wallet using Solana or Cosmos.
The source wallet must have enough native currency on it in relation to the network’s gas price for each corresponding native token before commencing the transaction, as it requires gas for both chains of origin and destination.
We recommend performing a small test transfer first before sending large amounts on either side, so we can confirm that everything transferred correctly, specifically to confirm that the bridge works and that we can send the funds to the correct target address.
Otherwise, there may be significant issues when bridging between two different types of exchanges.
Executing the Bridge Transfer
Once you have everything set, you can use your chosen wallet to connect to the bridge interface. Choose your token, choose the source blockchain, and choose the destination blockchain.
Upon doing this, you will see fees, estimated timeframes, and estimated outputs in the interface. Make sure you double-check each piece of info before you hit confirm.
The next step is to wait for your transaction to finish on both blockchains. On some bridges that use a Layer 2 platform, you may have to wait a couple of days to withdraw.
After the transaction is confirmed, you need to switch over to the destination blockchain, and if the assets don’t appear in your wallet, you can simply paste the token contract address into your wallet to find them.
Using Centralized Exchanges for Cross-Chain Transfers
Bridging crypto safely has been known to occur at centralized exchanges (CEX) like Binance and OKX, and they provide a new haven for the transfer of coins as the token is deposited on a given network and moved to another network via the withdrawal process.
The CEX will act as a bridge to facilitate the transfer of your tokens from one to the other, but it does not lend itself to custodial trust. When withdrawing, be sure that you are withdrawing to the correct network to your provided wallet address.
This can help with the transfer of tokens across different networks and will help make it easier for a person new to cross-chain transfers; however, you must have some level of caution to avoid permanent losses.
Best Practices to Avoid Losing Funds
To bridge cryptocurrency securely, it’s essential to be very thorough and double-check everything you are doing. Here are some of the most important tips:
- Always confirm the source and destination networks before sending money.
- Use small test transactions to verify successful transfers before sending larger amounts.
- Utilize hardware wallets for larger dollar amounts to safeguard your private keys.
- Keep a record of your transaction hash until you see it arrive in your destination’s wallet.
- Avoid bridging during busy networks or during volatile market periods.
Following these five steps will help you decrease your risk of error, phishing attempts, or exploiting smart contracts. Taking your time and doing your due diligence will guarantee that you are safe when transferring cryptocurrency.
Final Thoughts
Preparedness, trust, and care are key components to ensure the process of bridging crypto will be well executed and safe for all parties involved.
By having a reliable method of verifying bridges, starting with a small amount to test, and verifying the user’s wallet and network information before transferring, the user can achieve cross-chain asset transfers with no loss of value, regardless of whether they are using a self-custody wallet or using a centralized exchange.
Additionally, being consistent, cautious, and verifying the crypto bridging procedures prior to using them will create a secure, reliable environment for all individuals who are bridging crypto.
