Bancor, an on-chain liquidity protocol, announced today that work is currently underway on a cross-chain bridge that would allow Bancor to extend its decentralized liquidity protocol to Polkadot.
The implementation would eventually give users the ability to create pools, provide liquidity, and perform trusted cross-chain swaps on Bancor between Polkadot and ERC-20 tokens.
The Bancor protocol is chain-independent. Since BNT is used in every pool of the protocol, it serves as an intermediary in every swap (e.g. LINK <> BNT <> USDC). The same applies to cross-chain swaps, which can be done by branding BNT in the chain of origin and minting BNT in the target chain.
Bridge operators who listen for incoming transactions and forward transactions accordingly can be compensated in BNT, and deposits can be deposited in BNT.
The bridge is being built with the LiquidApps team, which is involved in developing innovative cross-chain technology.
Bridge operators will use light knots to listen to and interact with both chains. Unlike existing cross-chain bridges, where nodes can cost thousands or millions of dollars to operate, these lightweight nodes can be run in a simple web browser. This reduces the cost and set-up time for new bridge agents and allows everyone to participate in the safe construction and maintenance of the bridge.
The software underlying the nodes is WASM based and could potentially be used to enable mesh networks across multiple ecosystems (e.g. a contract could be called through Ethereum to transfer tokens from a Solana account to a Polkadot To send account).
“The creation of the ETH-DOT bridge will be the first step in making Bancor a multi-chain liquidity protocol. Once completed, Polkadot’s scalability and speed coupled with Bancor’s unique AMM capabilities could unlock novel liquidity pool designs and DeFi interactions. We look forward to announcing further details and schedules in the course of development. “
– The Bancor team
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