How to Build a Cross Chain Token Bridge

The market size of cross chain bridging was $1.43 billion at the end of 2024 ... and it is expected to continue growing at a CAGR of 26.7% - which roughly translates to a global market of $12.72 billion by 2033! Everybody wants a piece of that pie, and you being on this article gives us a safe assumption that you want in too.

So, let’s not waste any time and get right to it.

Wondering how to build a cross chain token bridge and what security concerns to consider during the blockchain bridge development? Continue reading – we’ll answer it all.    

What is a Cross Chain Token Bridge?

A cross chain token bridge is a technology that enables crypto users to move their digital assets or tokens from one blockchain to another - even when both chains are operating using different protocols. It essentially plays the role of a translator and literally 'bridges' the difference between both chains. These bridges are essential for enabling cross chain interoperability between different ecosystems so that users can access defi platforms or dApps across multiple blockchains.

Key Components of a Cross Chain Token Bridge

To achieve this communication capability, cross chain token bridges employ different components that contribute towards building a secure smooth operation. Here are the key components that help make a cross chain token bridge:

Smart Contracts

Smart contracts are self-executing programs that are deployed on blockchains to carry out trustless operations. If the required conditions are met, these contracts automatically execute themselves and the entire process is carried out securely, with full transparency.

Relayers

Relayers are entities that observe and confirm events on a blockchain network. For instance, if you deposit ETH into a bridge smart contract, the validators note the event on source chain and then notify the destination chain. They, therefore, also act as a communication link between the two chains.

Consensus Mechanism

One validator, alone, can be corrupted or hacked. Therefore, crypto bridges often use a consensus mechanism which is basically a group of validators that need to check and agree on any transaction before it is approved. This process prevents frauds and helps build security of the bridge. Consider it a multi-signature system with no single-party having full control or authority.

Liquidity Pools

Liquidity pools are the blood and base livelihood of any blockchain. It is a collection of tokens locked in a smart contract that is used to facilitate trades between assets of different blockchain networks. The main purpose is to enable automated trading without the need for a third-party.

Wrapped Tokens

Wrapped tokens are a trusted copy of your original token that allows you to run functions on blockchain without losing your tokens. For instance, say you have Bitcoin (BTC), which lives on the Bitcoin blockchain but you want to use it on the Ethereum network to access decentralized apps or services. Since Bitcoin can’t move directly onto Ethereum, you create a wrapped Bitcoin (wBTC): a token on Ethereum that represents your Bitcoin 1:1.  

This wrapped Bitcoin lets you use your BTC value within Ethereum’s ecosystem without losing ownership of your original Bitcoin. When you’re done, you can unwrap it back into BTC on its native blockchain.

Step-by-Step Guide to Building a Bridge

Cross chain token bridges exist to move assets across different blockchains that don't necessarily 'speak the same language'. The job of your bridge is to guarantee that when a token leaves chain A, the same value of it appears on Chain B without any surprises or attacks.  

Here's a step-by-step guide of how blockchain bridge development works:

Define Your Supported Chains:  

Start by drawing boundary lines for the operation of your cross chain token bridge. Will it support only EVM chains - like Ethereum and Polygon - or will it also support non-EVM chains - such as Solana? Remember, if your bridge is to only support EVM chains, it will follow a uniform development with same tooling, similar token standards, and even familiar wallets.  

But when you expand the horizon to cover non-EVM chains, the engineering will be different and you will have to account for different fee markets, account models, and runtime semantics.

Therefore, in this document, you will need to draw lines of your bridge's finality and reorg behavior, token representations, and infrastructure constraints. All of which will work to confirm the depth and working of your bridge.

Choose the Bridging Model:

There are four main cross chain bridging types:

1. Lock and Mint Bridges: In this cross chain token bridge, the native tokens are locked on the source chain, and wrapped tokens are minted on the destination chain.  
2. Burn and Mint Bridges: Burn and mint bridges are cross chain defi bridges that use a "burn and mint" mechanism to permit asset transfers between blockchains.  
3. Hash Locks and Time Lock Bridges: This form of cross chain token bridge uses cryptographic hash locks and temporal locks to permit asset transfers.  
4. Trusted versus Trustless: In a trustless system, anyone can be a validator whereas in a trusted bridge, a network of pre-selected validators monitors token deposits on the source chain, locks them, and mints tokens on the target chain

We have already discussed them in detail, which you can check out here.

Develop Cross Chain Smart Contracts

Regardless of which model you choose for your bridge, it has to operate through smart contracts. As discussed in the prior section, smart contracts fulfill the role of automatically executing transactions if and when a set of pre-written rules is followed.  

In a blockchain bridge development, the smart contract accepts deposits and emits an event on the source chain. This event then becomes your source-of-truth “message”. On the destination chain, this contract is verified with proof that the source event actually happened. Once the verification is done, the destination chain will carry out the required operation and release funds.

Implement Validators (Only Applicable for Trusted Bridges):  

In a trusted model, you also need a set of validators to confirm that an event on Chain A actually occurred. This centralized relayer observes the source chain, constructs a message, signs it, and then calls the destination chain to confirm.

Monitor Bridges to Ensure Security

Bridges often fail at this step as 'watching' becomes a boring issue. However, here's a checklist for what you need to watch out for in cross chain token bridge while any transaction is being carried out:

Testing and Auditing:

Every cross chain token bridge is a composable system in which bugs hide in the seams. You need to carry out extensive and continuous testing to ensure your bridge is safe. Cross chain bridge vulnerabilities are endless. But you can do unit tests, fuzzy/ property tests, and even integration tests to ensure your bridge's end-to-end message lifecycle is secure.

Security Considerations

Building a secure chain bridge means introducing technical safeguards, which can often complicate the user experience. In the past, several high-profile hacks have happened, indicating the cross chain bridge vulnerabilities. The Wormhole Bridge hack, for instance, allowed exploiters to steal over $320 million in assets, leaving traders stunned.  

Here are some security considerations you need to take into account to avoid blockage in cross chain interoperability:

Conclusion

Cross chain token bridges have quickly become the cornerstone of blockchain interoperability. The market is increasing in size exponentially as the requirement is growing. However, it is important to remember that when building, a secure and reliable bridge requires careful attention to smart contract design, validator management, transaction monitoring, and rigorous auditing.

When implemented carefully, a cross chain token bridge not only enhances user experience, but also drives growth and adoption for blockchain technology.