Why there’s a need to bridge your assets
One of the most commonly mentioned terminologies recently is Layer 2 scaling solutions, but what exactly are they?
Before we go into detail for all the Layer 2 scaling solutions, let us look at what problems the Layer 2 solutions are trying to fix, and why they are growing in importance.
Essentially, Layer 2 scaling solutions are built on top of the Ethereum network, and are meant to fix the scaling issue faced by Ethereum.
As Ethereum grew in popularity, the on chain transaction of Ethereum skyrocketed. As Ethereum was originally built around the “proof of work” concept, there is a limitation to how fast these transactions can be “cleared”.
Since the popularity of the Ethereum network is exploding, it is unable to clear the transactions fast enough to meet the demand, leading to a high transaction fees (gas fees). To put things in context, the average fee per transaction for Ethereum is as much as $30 per transaction, compared to less than $1 give years ago. This means that there has been a 3,000% increase in gas fees.
New blockchains and Layer 2 solutions exploded in popularity recently as more and more people move their assets around to get cheaper transaction fees.
Here’s a recent map done by djma on how to move your assets around the different blockchains:
|Ethereum <> Solana
|Ethereum <> Optimism
|Ethereum <> Arbitrum
|Dai <> xDAI
|Ethereum <> Terra
|Ethereum <> Polygon
|Ethereum <> Avalanche
|Ethereum <> Fantom
The benefits of bridging your assets to these new blockchains include higher speeds as well as lower transaction fees. Here’s a table of comparison for the various speed and fees for the different blockchains:
Bridging assets is quite simple, similar to transfering your assets from one account to another, you simply need to connect your existing wallet on the Ethereum network and start moving the assets around.
If you are looking for the different ways to bridge your assets around, do bookmark this page for reference as we continue to update the table.