Why bridges are essential for Open Money interoperability

Bridges play a crucial role in the Open Money ecosystem by enabling seamless, secure, and efficient cross-chain transfers.

One of the defining features of Open Money is that it is network money. What that means is that Open Money systems derive their value from the overall security, distribution, and liquidity of a decentralized network.

But one of the issues with building various decentralized networks is that it create a system that feels fragmented. If it gets hard to move money between networks, then there's a risk that Open Money systems are just recreating some of the problems that already exist with the current financial system.

The ability to quickly, securely, and cheaply move money across networks is key to the success of a decentralized system. That's why a piece of infrastructure called bridges are so important. Bridges provide one way to quickly and easily create a system of interoperability.

Why bridges matter

For years, the blockchain space has been a collection of independent networks, each with its own infrastructure, consensus mechanisms, and communities. Bitcoin, Ethereum, Solana, and others have all innovated independently, but this fragmentation has also created barriers.

Bridges allow assets and information to move between disparate networks, breaking down silos and making Open Money more fluid and interoperable. Without bridges, each blockchain would be an island, limiting composability and forcing users into single-chain ecosystems. This fragmentation results in inefficiencies, where liquidity remains locked within individual chains, developers are forced to build in isolation, and users face unnecessary friction when interacting with multiple networks.

Another way to think about this is that bridges unlock true decentralization, where value moves freely and users are no longer bound to one network’s constraints. A seamless bridging experience allows users to take advantage of the strengths of multiple blockchains — whether it’s Bitcoins's security, Solana’s speed, or Ethereum's composability — without needing to commit to just one ecosystem.

The interoperability enabled by bridges fosters greater innovation, as developers can build applications that leverage the best features of various chains, and users can engage with decentralized finance (DeFi), NFTs, and other Open Money applications without the technical burden of managing assets across multiple wallets and protocols.

How bridges work

At a high level, bridges function by locking assets on one chain and minting equivalent assets on another. When you move ETH from Ethereum to Polygon via a bridge, for example, the ETH isn’t physically transported. Instead, it’s locked in a smart contract on Ethereum, and a corresponding amount of wrapped ETH (wETH) is issued on Polygon. (Wrapped ETH is a tokenized version of ETH that maintains a 1:1 peg but conforms to the ERC-20 token standard, making it compatible with decentralized applications and smart contracts on other networks).

Bridges can be categorized into two main types:

Trusted bridges: Rely on centralized entities or federations to manage asset transfers. Examples include Binance Bridge and Avalanche Bridge.
Trustless bridges: Use smart contracts, oracles, and cryptographic proofs to enable decentralized cross-chain transfers. Examples include Hop Protocol and Wormhole.

Bridges are still evolving, and security remains a primary concern — some of the largest exploits in crypto history have targeted bridge vulnerabilities. However, as cryptographic techniques like zero-knowledge proofs and multi-party computation improve, bridges will become even more resilient and trust-minimized.

In the Open Money era, bridges are more than infrastructure — they are the foundation of an interoperable financial system. As new protocols continue to integrate, we move closer to a world where users interact with value, not blockchains, and where liquidity flows seamlessly across networks in a system that is truly open.

This post is part of the Open Money Project, an ongoing series that forms the basis of a longer work. Subscribe to get a weekly update as it unfolds.