What Is the Difference between a Custodial and a Trustless Bridge?
A custodial bridge relies on a centralized entity or a small group of validators (custodians) to lock and release the assets, requiring users to trust the custodians. A trustless (or decentralized) bridge uses smart contracts and cryptographic proofs to automatically and permissionlessly manage the asset locking and minting process, eliminating the need for human intermediaries and reducing counterparty risk.
Glossar
Custodial Bridge
Architecture ⎊ A Custodial Bridge represents a specific cross-chain interoperability architecture where a centralized entity or a limited set of validators maintains control over the locked assets on the source blockchain.
Trustless
Architecture ⎊ The concept of trustlessness, within cryptocurrency, options trading, and financial derivatives, fundamentally redefines reliance on intermediaries.
Decentralized Bridge
Architecture ⎊ This cross-chain solution employs a network of independent, non-custodial validators or smart contracts to facilitate asset transfer between distinct blockchains.
Bridge
Nexus ⎊ The term "Bridge" within cryptocurrency, options trading, and financial derivatives signifies a mechanism facilitating the transfer of assets or value between disparate systems, protocols, or markets.