Blockchain bridges: how they work and where they fail

You have ether on the Ethereum network and want to use an app that runs on another blockchain. You cannot simply “send” the ether there: each network keeps its own ledger and does not read the ledgers of others. To cross over, you use a bridge, a service that links the two networks.

This article explains how bridges work, why they concentrate risk and which failures have already caused losses of hundreds of millions of dollars. The information was checked on October 8, 2026.

Why blockchains need bridges

Each blockchain works as an isolated environment. The official Ethereum documentation explains that networks cannot natively exchange data or assets with one another, and that bridges exist precisely to connect them (ethereum.org, documentation).

The practical reason is that each network has different strengths, such as cost, speed or capacity. A user may want to move ether to a cheaper layer-2 network, or use an app that only exists on another blockchain (ethereum.org).

The Bank for International Settlements (BIS) views this landscape with more caution. In its 2022 annual economic report, the bank classified fragmentation into many incompatible networks as a structural flaw of the crypto ecosystem and stated that interoperability between ledgers is not achievable in practice, because each blockchain keeps its ledger separate (BIS, 2022). Bridges are the workaround for that separation.

To review the basics, see How the Bitcoin blockchain works and What Ethereum is and how it works.

How a bridge moves a token

In most cases, no token actually “travels.” What happens is an exchange of records on the two networks. The Ethereum documentation lists three main methods (ethereum.org, documentation):

• Lock and mint: the asset is locked in a contract or with a custodian on the source network, and a representation of it is created on the destination network.
• Burn and mint: the asset is destroyed at the source and a new one is created at the destination.
• Atomic swap: you swap your asset with someone else who already holds the equivalent asset on the other network.

The representation created at the destination is usually called a wrapped token. The classic example is WBTC, a token on the Ethereum network that represents bitcoin. Ethereum.org itself stresses that it is a version of Bitcoin on Ethereum, not the original asset on the Bitcoin blockchain; to hold actual bitcoin, you have to go back across the bridge (ethereum.org).

This detail is central. The wrapped token is only worth the same as the original as long as the reserve on the other side exists and can be redeemed. If the reserve disappears, the token in your wallet loses its backing.

Whom you need to trust

Bridges differ in how they confirm that a deposit happened on the source network. The Ethereum documentation separates two broad groups (ethereum.org, documentation):

• Trusted bridges: they rely on external verifiers, such as a group of keys that must sign together (multisignature), an oracle network or multi-party computation systems. They tend to be fast and cheap, but you depend on the security and honesty of whoever operates them.
• Trustless bridges: they use the connected networks themselves and their validators to verify messages. They add no new trust assumptions beyond the blockchains involved and are therefore considered safer, at the cost of limitations in speed or connectivity.

The BIS notes that most bridges depend on a small number of validators, whom users must trust (BIS, 2022). In practical terms: whoever controls those keys controls the reserve.

Oracles, which bring data from outside into the blockchain, follow a similar trust logic. The topic is covered in Oracles: how a physical asset reaches the blockchain.

Why bridges become targets

The Financial Stability Board (FSB) sums up the problem: by holding assets from one network and issuing wrapped tokens on another, a bridge creates repositories that can accumulate large amounts and therefore become targets for theft and diversion (FSB, 2023).

Chainalysis, a blockchain analytics company, points to two reasons (Chainalysis, 2022):

1. There is a central fund backing the tokens on the destination network, whether in a smart contract or with a custodian.
2. Bridge design is still an open technical problem, and the variety of models creates new loopholes before established best practices exist.

The numbers help gauge the scale. According to a Chainalysis estimate published on August 2, 2022, about US$ 2 billion had been stolen in 13 bridge attacks, most of it that year, accounting for 69% of all funds stolen in 2022 up to that date (Chainalysis, 2022). This is a mid-2022 snapshot, not an updated total.

Three failures with a lot to teach

The cases below show that a bridge can fail at different points: in its keys, in its verification or in a code update.

Compromised keys: the theft linked to Axie Infinity

On March 23, 2022, an attack on a blockchain project linked to the game Axie Infinity took almost US$ 620 million, according to the US Department of the Treasury. The Treasury attributed the theft to the Lazarus Group, linked to the North Korean government (US Treasury, 2022). Chainalysis estimated that North Korea-linked groups had stolen about US$ 1 billion in 2022 up to August, entirely from bridges and other DeFi protocols (Chainalysis, 2022).

The lesson, in the newsroom’s assessment: when a few keys authorize withdrawals, whoever obtains those keys can drain the reserve without having to break any cryptography.

Bypassed verification: Wormhole

On February 2, 2022, an attacker exploited the Wormhole bridge on the Solana network. According to an analysis by the auditing firm CertiK, the program checked the signatures of the bridge’s “guardians,” but read the data from an account supplied by the attacker, without confirming it was the system’s legitimate account. As a result, forged signatures passed the check and 120,000 wrapped ether were issued with no backing at all. Jump Trading, the project’s parent company, replaced the funds (CertiK).

The lesson: a single validation error makes it possible to create unbacked tokens, and those holding them depend on someone covering the hole.

A misconfigured update: Nomad

On August 1, 2022, the Nomad bridge lost about US$ 190 million. According to CertiK, a routine update left a reference value used in verification set to zero, and the contract began accepting messages that had never been proven. After the first attack, other people and bots simply copied the transaction, replacing the destination address with their own (CertiK).

The lesson: updating a contract is also a moment of risk, and a public flaw can be exploited by anyone within a few hours.

How the code running on these bridges works, and its limits, is covered in What smart contracts are and how they work.

The risks you take on when using a bridge

The Ethereum documentation lists risks that go beyond attacks (ethereum.org, documentation; ethereum.org):

• Code risk: a flaw in the smart contract can lead to the loss of funds.
• Counterparty risk: in trusted bridges, operators can block transfers (censorship) or collude to divert the reserve.
• Systemic risk: wrapped tokens circulate in other protocols; if the bridge fails, the problem can spread to those who accepted those tokens.
• Operational risk: software failures, attacks and human error, including by the user. How bridges behave under congestion or network reorganizations is still an open question.

The FSB includes bridges among the operational weaknesses of decentralized finance, because they expose users to disruptions and theft (FSB, 2023). IOSCO, which brings together capital markets regulators, recommends that those offering DeFi products that depend on bridges be required to identify, manage and mitigate these risks (IOSCO, 2023). This is a recommendation to regulators, not a protection you already have: in general, there is no guarantee fund and no one to turn to when a bridge is drained. A loss can be total.

For the broader context of these services, see DeFi: what decentralized finance is.

Questions to ask before crossing

Ethereum.org states that bridges are still at an early stage of development and that users need to understand the trade-offs each one makes (ethereum.org). Some questions help:

• Who validates the transfers? A small group of keys, an oracle network or the blockchains themselves?
• What backs the token I will receive? Is it the native asset of the destination network or a wrapped version that depends on a reserve?
• Who can change the contract? Is there an admin key capable of updating the code at any time?
• Is the address the official one? Fake websites are a common form of scam; see Crypto wallet phishing: how to protect yourself.
• How long will I hold the wrapped token? As long as it is in your wallet, you remain exposed to the bridge.

Ethereum.org points to independent risk analyses, such as those by L2BEAT and DefiLlama, as a starting point. They help compare models, but do not eliminate the risk.

Key takeaways

Bridges exist because blockchains do not communicate. In most cases, they hold assets on one side and issue a representation on the other, which creates large reserves that are attractive to attackers.

The losses recorded so far came from compromised keys, flawed verification and botched updates. Before using a bridge, know whom it asks you to trust and remember that the wrapped token is only worth something as long as the reserve on the other side exists.