Terra Luna. A shadow blockchain of its former glorious self. Or is it? Since the days of its epic collapse in May 2022, Terra has slowly been rebuilding. On the 25th of May, 2022, the Terra community voted to start a brand new chain. Both, the new chain and its native token, retain their names – Terra and $LUNA. As of time of writing, the new Terra has a Total Value Locked (TVL) of $22 million.
So, if you would like to bridge your assets to and from Terra, then stick around! We’ll be exploring the best bridge to and from Terra. In part 1 of this article series, we’ll take a look at what the Terra bridge is. We’ll also review its safety and its inner workings. So, stay tuned!
What Is Terra Bridge?
Terra bridge is a decentralized cross-chain bridge. This means you can transfer crypto tokens to and from Terra chain, using this bridge. And, no central entity controls the bridge. Only users like you and me can decide where we want our funds to head to. As of now, the blockchains supported are:
- Terra.
- Ethereum.
- Avalanche.
- Cosmos Hub.
- Osmosis.
- Kujira, other Cosmos blockchains.
In total, Terra bridge allows assets from 11 other blockchains to move to and from Terra.
1/ Terra Bridge V2 is now LIVE on Terra mainnet using @axelarcore & @cosmosibc! 🙌
With V2, users can transfer assets to & from Terra 2.0, Ethereum, Osmosis, Secret, Cosmos, & Juno ↔️https://t.co/iOK7YyISjz
— Terra 🌍 Powered by LUNA 🌕 (@terra_money) June 3, 2022
Is Terra Bridge Safe?
Before using any Decentralized Application (dApp), it’s always good to check for its safety. This rings much truer for bridges. In fact, bridges have been a common target for exploits. So right now, we’re going to see if Terra bridge is safe or not.
First, let’s look at the team that’s behind the bridge. Terraform Labs is the team that created the bridge. It’s also the team behind the Terra chain. Hence, you can conclude that the bridge was made by a team with experience. The developers would know how Terra works, and how bridging would work for Terra. This adds some plus points for Terra bridge’s safety.
Next, let’s check if the the bridge has been audited by a third party. As stated earlier, bridges are extremely prone to hacks. A small error in its smart contract could give hackers a chance to steal millions of tokens from the bridge. In this case, we’re unable to find any audits done for Terra bridge. Now, this could be because it leverages Axelar and Cosmos’ technology for bridging. We will explore this further in the next section. But for now, a lack of audits on Terra bridge raises some concerns.
To summarize, the bridge is reasonably safe to use. To add on, we would recommend for users to perform test transactions in small amounts first. Once these have passed, then you can bridge over larger amounts. Furthermore, using the bridge poses much less risks, compared to providing liquidity for the bridge. It is this liquidity which hackers are trying to get their hands on.
How Does Terra Bridge Work?
Earlier, we mentioned that the bridge runs on Axelar and Cosmos’ technology. What does this mean exactly? Let’s dive in.
First, Axelar enables the cross-chain transfer of tokens between Terra, Ethereum and Avalanche. Axelar is a protocol focusing on interoperability between chains. It uses message passing to allow dApps to make cross-chain transactions. Here is an example:
Terra Bridge (https://t.co/xZDUYjaBOR) is now connected to #Avalanche and #Fantom via Axelar SDK & network. So u can:
👉Bridge 2 Avalanche & LP/swap on @pangolindex and @traderjoe_xyz.
👉Bridge 2 Fantom & LP/swap on @beethoven_x for UST 💰💰💰👆👆Try it: https://t.co/W8Fkrjhpjb
— Axelar Network (@axelarcore) March 21, 2022
Next, Cosmos enables the cross-chain transfer of tokens between Terra, Cosmos Hub, Osmosis and other Cosmos chains. To do this, Terra bridge uses Cosmos’ Inter-Blockchain Communication (IBC) protocol. IBC provides a standard communication channel for dApps on different chains to talk to each other. Here are all the protocols that have this technology.
With these underlying protocols, Terra bridge is able to bridge tokens in a cross-chain way. In simple terms, the bridge acts just like a web that can connects them. It’s a user-friendly interface for users like you and me. However, once we’ve made an input to bridge, it’s Axelar and Cosmos’ IBC that does the heavy lifting.
Conclusion
That concludes the 1st part of our Terra Bridge guide! Stay tuned for part 2, where we’ll guide you on how to use the bridge for cross-chain transfers.
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