What is Bridging?

Cross-chain bridges connect blockchain networks and let users access assets or their representations on another chain. One example is Wrapped Bitcoin (WBTC), an ERC-20 token on Ethereum designed to represent BTC held in custody, rather than BTC moving onto Ethereum itself.

WBTC does not give Bitcoin itself ERC-20 functionality. BTC remains on Bitcoin, while the separately issued WBTC token can be transferred and used by compatible Ethereum applications.

Why use another network?

• Access to different execution environments. Bridging can let users transact on a network with lower fees; speed and cost depend on the destination network and the bridge's own processing requirements.
• Access to liquidity on another network, without a guarantee of deeper markets or a stable price.

WBTC illustrates this utility: its Ethereum token can be used in compatible DeFi applications while the underlying BTC remains in custody.

Three ways assets reach another chain

Bridges coordinate actions across separate blockchains; they do not all convert tokens through a single smart contract. A wrapped-token bridge holds an underlying asset on one chain and issues a representation on another. Other designs exchange existing liquidity or burn and mint issuer-native tokens.

Lock/mint–burn/release flow: Avalanche Bridge's wrapped-ERC-20 path, described in its 2021 technical account, illustrates this design:

• For this wrapped-token path, a user follows the Avalanche Bridge instructions to initiate a supported ERC-20 transfer using a connected wallet.
• On this wrapped-token path, the bridge holds the Ethereum tokens and verifies the deposit before authorizing an equivalent amount of wrapped tokens on Avalanche.
• Return flow: the wrapped tokens are burned on Avalanche, and the bridge releases the corresponding Ethereum tokens, subject to fees.

This wrapped-token design lets Ethereum-origin assets go to Avalanche and return to Ethereum. That is different from supporting arbitrary Avalanche-origin tokens. Avalanche's FAQ separately identifies a USDC route using CCTP, which burns and mints native USDC rather than issuing a wrapped token. Supported assets, fees and processing times depend on the route.

Liquidity-transfer flow: user deposits on the source chain → a liquidity provider or relayer supplies existing tokens on the destination chain → the provider is repaid through the protocol's settlement process. Across documents this relayer model; it does not require minting a new wrapped token for each user transfer.

Issuer-native transfer flow: burn the issuer's token on the source chain → authorize issuance on the destination chain → mint the issuer's native token there. Circle launched its Cross-Chain Transfer Protocol (CCTP) in April 2023; it transfers native USDC using burn-and-mint rather than creating a third-party wrapped claim or using traditional bridge liquidity pools.

Custody and redemption: the WBTC example

WBTC was first issued on Ethereum in 2019. The WBTC whitepaper assigned custody to BitGo and initial merchant roles to Kyber Network and Republic Protocol. The WBTC website provides reserve information and lists participating applications.

WBTC separates custody, merchant services and governance. In the original framework, the custodian holds BTC and has authority to mint; merchants initiate mint requests and burn WBTC for redemption. DAO members use a multisignature contract to approve changes and add or remove custodians and merchants.

One WBTC is designed to represent one BTC held in custody. This is Bitcoin backing, not a dollar-price guarantee. Reserve accounting and the ability to recover the underlying BTC are separate questions.

WBTC's mint-and-burn contracts control token issuance, not its exchange price. Buying or selling WBTC takes place in markets; custody and access to redemption also matter. The merchant–custodian minting flow is:

• A merchant initiates a mint request and sends BTC to the custodian.
• The custodian waits for the Bitcoin deposit to be confirmed.
• The custodian mints the corresponding WBTC to the merchant on Ethereum; the merchant distributes WBTC to users.

Users can use WBTC as collateral in lending applications. They also rely on the custody and redemption arrangements behind the token.

Backing and exits are separate checks

Backing and exits are separate checks:

Hypothetical example: a bridge holds one BTC for each of 100 wrapped tokens but pauses redemptions for maintenance. All 100 BTC may remain in custody, and tokens may still transfer on Ethereum. Holders can sell only if buyers or pools offer liquidity, possibly at a discount; they cannot complete a paused redemption simply because reserves exist.

For a later real-world example, see The Defiant's October 2026 report on Threshold's tBTC backing statement and bridge pause.

What a bridge asks users to trust

Bridge designs differ both in who controls custody and in how cross-chain messages are verified:

• Custodial: A custodian holds the underlying assets; users rely on its controls and willingness and ability to release them.
• Non-custodial: Assets are managed by protocol rules rather than a conventional custodian. This does not by itself remove trust assumptions about code, external signers or administrators.

In WBTC's original model, BitGo held the underlying BTC. Wormhole instead uses a distributed Guardian set to attest to cross-chain messages; that adds a verification assumption beyond the connected chains. Decentralized does not automatically mean trustless.

Bridge failures can involve custody keys, message verification or smart-contract code. Concentrating assets can create an attractive target, but distributing control among operators does not eliminate the risk of theft or interrupted operation. For another design, see The Defiant's report on Utexo's bridged USDT, backing and release signers.

The March 2022 Ronin attack illustrates key-security risk: BlockSec's analysis describes compromised validator private keys being used to withdraw assets from the bridge.

Before bridging, check the exact token and network, who verifies transfers, and how to return to the underlying asset. Access to a website is separate from access to bridge contracts: see The Defiant's October 2026 report on Blast's shutdown and contract-based withdrawal route.

Series Disclaimer:

This series article is intended for general guidance and information purposes only for beginners participating in cryptocurrencies and DeFi. The contents of this article are not to be construed as legal, business, investment, or tax advice. You should consult with your advisors for all legal, business, investment, and tax implications and advice. The Defiant is not responsible for any lost funds. Please use your best judgment and practice due diligence before interacting with smart contracts.

Correction (2026-11-01): Wrapped tokens represent assets; they do not convert them. WBTC contracts do not guarantee its price. Wormhole relies on external verifiers. Avalanche transfers work both ways. Ronin involved stolen validator keys, not the code flaw previously implied.