How Do Cross-Chain Bridges Affect a Token’s Movement and Cost?
Cross-chain bridges allow tokens to be transferred between incompatible blockchains, increasing their liquidity and reach. A bridge typically locks the token on the source chain and mints a wrapped version on the destination chain.
While they increase movement, bridges introduce an additional cost in the form of bridging fees and potential smart contract risk. They are vital for multi-chain DeFi ecosystems.