According to the bridge’s developers, ERC20 tokens will be able to live natively on the Internet Computer network thanks to a new cross-chain bridge.
The Dfinity Foundation created the Internet Computer blockchain to help with the development of a decentralised layer of web infrastructure. A16z, Polychain Capital, and other well-known funds have invested in the company.
Terabethia is a contract communication, asset mirroring, and transfer bridge that works across many blockchains. It’ll allow contracts on both chains to communicate, as well as anyone to mirror and use any Ethereum asset on an Internet Computer and vice versa, thanks to a fork of the Ethereum scaling solution StarkWare.
Bridges allow blockchains to exchange data, cash, and smart contract instructions with one another. These work independently of the blockchains with which they linked in terms of rules and consensus methods.
“We trust that the Internet Computer can achieve the same for Ethereum assets and apps, and in the long run, it may even turn to be the best L2 for Ethereum,” stated Harrison Hines, founder of Psychedelic, the Web 3 development firm behind Terabethia.
What the bridge accomplishes?
The bridge is being built ahead of Internet Computer’s native Ethereum integration, which will link the two chains. The link will allow Internet Computer smart contracts to store Ethereum assets on Ethereum and make calls to them, but ERC20 assets will not be directly accessible. This difficulty can be handled by using a bridge.
Transferring assets between the Internet Computer and Ethereum could help the two blockchains’ respective user bases create liquidity and complementary products, such as non-fungible tokens (NFTs) and other decentralised finance (DeFi) businesses.
DeFi protocols give financial services to users, such as lending, borrowing, and trading, using smart contracts rather than third intermediaries.
In 2021, Internet Computer launched with a scalability-focused “reverse gas model”. Developers fund the applications/contracts that use their gas. Which is a fee to pay in order to use a blockchain, in this case, an Internet Computer.
The response from investors, on the other hand, has been lukewarm. ICP tokens have declined 97% in value since their launch in May 2021. From $700 to $21 as of Friday morning, amid allegations of insider trading and large token holders abandoning their positions. The coins’ market capitalization was $5 billion on Friday, down from $18 billion in May 2021.