New bridge connects Avalanche with Ethereum for DeFi transfers

Layer 1s • February 8, 2021, 12:00PM EST
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A group of developers has set up a new bridging mechanism between the Avalanche and Ethereum blockchain networks.

The bridge will allow users of DeFi tools to transfer their assets between the two ecosystems. Its creation also means that developers of DeFi projects on Ethereum will be able to offer users an alternative platform on which to transact.

Part of the appeal is of Avalanche as a blockchain is its fast transaction times – less than a second – and low fees. Avalanche went live on mainnet last September, as previously reported. The project has raised some $60 million to date through a mix of token sales and venture funding.

“Bridges play a vital role in enabling DeFi to grow beyond the borders of one network to complementary ecosystems,” explained Emin Gün Sirer, chief executive and co-founder of Ava Labs. “This bridge will open the floodgates for hundreds of Ethereum assets, including cornerstone DeFi assets like WBTC, AAVE, and others to flow into Avalanche, fuelling applications like decentralized exchanges, lending protocols, and prediction markets.”

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The bridge was constructed by blockchain development group ChainSafe, with Protofire, Hashquark, POA Network, Avascan and Meter.io securing the bridge as “relayers”.

To use it, DeFi users will have to lock either Wrapped ETH (WETH), ERC-20 or ERC-721 tokens in a ChainBridge contract on Ethereum. An equivalent token will then be minted on Avalanche and deposited to the desired address. This newly minted asset can then be used in DeFi applications on Avalanche.

A spokesperson for Ava Labs said that tokens minted in this way on Avalanche will appear the same as the token locked in the ChainBridge contract. For example, LINK, the native token of Chainlink, will look the same on Avalanche as it does on Ethereum.

The Avalanche equivalents are not stablecoins, the spokesperson added. They are simply the same assets migrated onto Avalanche.

About Author

Ryan Weeks is deals editor at the The Block, focused on fundraising, M&A and institutional trends in the crypto space, among other things. He is particularly interested in investigative work — so please send tips! Ryan previously worked at Financial News, Dow Jones as a fintech correspondent in London. Prior to that, he wrote for several different publications, including Sifted, AltFi and Wired. Beyond journalism, Ryan is a keen reader and writer. He enjoys all things active, especially running, rugby, climbing and tennis.