Use cross-chain swaps and complete transactions faster! (2024)

Cross-chain swaps (atomic swaps) are the exchange of assets that are located on different networks, using bridges.

In simpler terms, a cross-chain swap allows for safe and decentralized exchange of various cryptocurrencies by selecting the blockchain and token (for example, the BNB Chain network — BNB) that you want to exchange for another token in a different blockchain (for example, the Ethereum network — ETH).

To better understand how cross-chain swaps work, let’s first familiarize ourselves with cross-chain bridges.

Cross-chain bridges are software solutions designed to provide compatibility, intended to facilitate seamless interaction between blockchains. In other words, they use smart contracts to facilitate the transfer of assets and data between different blockchain networks that would otherwise operate in isolation.

Cross-chain bridges, in most cases:

• Enhance liquidity in the blockchain ecosystem. By enabling the movement of assets between chains, more trading pairs become available, and assets in new chains can leverage the liquidity of existing chains.
• Optimize scalability. As the Web3 ecosystem continues to grow, individual chains often encounter limitations such as congestion, low transaction speeds, and high fees. Cross-chain bridges address these issues by distributing network load and increasing transaction speeds.
• Expanded functionality. Cross-chain bridges facilitate new use cases and functional capabilities by enabling interaction between smart contracts in different blockchains.

How does a cross-chain bridge work:

• First, the bridge utilizes a deposit of native tokens on network A.
• Then, it verifies this deposit and determines if there are enough funds to complete the transaction.
• Afterwards, the bridge releases the corresponding amount of wrapped tokens on network B, and the token exchange takes place.

The most well-known cross-chain bridges include zkBridge, DeBridge, Owlto.Finance, Orbiter.Finance, and the bridges on Wormhole.

Now let’s revisit cross-chain swaps, one of the applications of cross-chain bridges.

During cross-chain swaps, tokens issued on chain A are exchanged for tokens issued on chain B — all through a decentralized network.

Here’s how cross-chain swaps work:

• AirdropHunter finds a bridge connecting chain A and chain B.
• Then, it deposits its tokens on chain A and sends their wrapped version to the target chain (B), where the desired token is located.
• Afterwards, AirdropHunter exchanges the wrapped tokens via a DEX at the destination and receives the tokens.

Let’s consider how cross-chain swaps work with an example involving Alice:

Suppose Alice wants to exchange an asset on chain A for an asset on network B, and she doesn’t want to use a centralized exchange. Without liquidity routing, this cross-chain swap requires at least three separate operations, and some of them can be dauntingly complex, depending on what tokens and wallets Alice already has.

If, as in the example in the introduction, network B is a new network that Alice is trying to explore, the process can be dauntingly complex.

1. First, Alice must find a DEX on chain B that has liquidity for the pair she wants to exchange. This will be a pair between the bridged version of Chain A’s asset and the native version of Chain B’s asset. If this doesn’t exist, Alice is out of luck — or she needs to make an additional swap to get into an asset that has a liquid pair with the desired asset on network B.
2. Before Alice can move on to the final step, she needs to ensure she has two things: a wallet on chain B and a sufficient amount of gas tokens on chain B to pay the transaction fee for the swap.
3. Once Alice finds liquidity and sets up wallets and gas tokens in both networks, she heads to the bridge connecting the two networks, connects her wallet on chain A, and initiates the transfer to chain B.
4. Alice initiates the swap on a DEX on chain B and breathes a sigh of relief.

XY Finance is the most well-known cross-chain aggregator that utilizes universal asset routing across multiple chains. The aggregator supports 19+ EVM chains and over 270+ DEX protocols.

XY includes networks like zkSync, Linea, Scroll, zkEVM, Base, and others, where making transactions can potentially earn you drops from projects. Alternatively, if you prefer not to manually transact, you can use AirdropHunter, which handles all activities for you!

Soon, XY Finance plans to launch integration with the Blast ecosystem, so you can familiarize yourself with its ecosystem and start engaging in activities there now!

SquidRouter is a cross-chain protocol developed by the Axelar team. The protocol also enables cross-chain exchanges, tracks transaction status, and selects convenient paths for asset exchanges.

Currently, Squid has raised $7.5 million from PolyChain Capital, North Island Ventures, and other funds, with the possibility of a drop from the project in the future.

Squid is part of the Cosmos ecosystem, which we detailed here.

SushiSwap is a major DEX protocol that allows token swaps within one network or across different networks (over 5 networks, including BNB, Base, Polygon, and others).

At present, the protocol has over 50,000+ different token pairs, and its total liquidity reaches $500,000,000.

Symbiosis is a cross-chain aggregated liquidity protocol (AMM DEX) that supports a large number of EVM and non-EVM networks (over 25+), as well as L1 blockchains.

Additionally, the protocol allows for fund transfers to wallet addresses across different multi-chain networks.

In summary, cross-chain swaps enable token exchanges across different networks, allowing interaction with a large number of networks and highlighting wallets in these networks to potentially receive airdrops in the future!

Hurry up and start claiming future airdrops, where AirdropHunter will perform cross-chain swaps and claim drops for you.

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