With the ability to cross chain swap and bridge on Rainbow, it’s important to recap what cross chain swapping and bridging are!
What are cross chain swaps?
A cross-chain swap allows you to swap different crypto between two networks directly. To get a better understanding of cross chain swaps, read this example comparison from swapspace:
Each country has its own unique currency. Dollars, for example, cannot be used in China and vice versa with yuans in America. Currency systems are independent of each other, and different ecosystems of blockchains and networks are also independent. Without using cross chain swapping you cannot transfer BTC directly to ETH, since there is no interoperability between these assets. In the traditional financial system, this problem is solved by automatic currency conversion. So if two people (one with USD and the other with CNY) want to exchange their currencies for each other, each of the parties can give the other the number of coins equivalent to the change according to a certain rate. For example, $100 would be equivalent to about ¥ 636,099.
The same above example happens in the crypto space! Cross chain swaps allows for us to swap/exchange tokens on different chains. You can swap your mainnet Ethereum for tokens on Optimism, Arbitrum, Polygon, and vice-versa!
What is bridging?
A bridge connects two different blockchains to allow the transfer of tokens between them. To quote ethereum.org:
Blockchain bridges work just like the bridges we know in the physical world. Just as a physical bridge connects two physical locations, a blockchain bridge connects two blockchain ecosystems. Bridges facilitate communication between blockchains through the transfer of information and assets.
Cross Chain Swaps and Bridging with Rainbow:
Rainbow makes the swapping and bridging process simple and fun! Like with the ability to bridge mainnet USDC to Optimism USDC, Rainbow makes these processes straightforward to participate in while providing a clean experience at every step of the way.