How Do ‘Fast Withdrawal’ Services Charge a Fee for Their Liquidity?

Fast withdrawal services, often called 'liquidity providers' or 'bridges,' charge a small fee, typically a percentage of the withdrawn amount, for providing immediate liquidity. They essentially front the user's funds on Layer 1 instantly, taking on the risk and the capital cost of waiting for the official withdrawal period to expire.

Their fee compensates them for this service, the capital cost, and the smart contract risk involved in the transaction.