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How To Bridge Crypto Assets Using Hop Protocol: 5 Simple Steps

How To Bridge Crypto Assets Using Hop Protocol: 5 Simple Steps

Explainers Essentials

18 Jan 2022

2022 has been forecasted as the year for Layer 2 protocols, with popular hashtags such as #L22022 and #L222 emerging on Twitter. Some analysts are also predicting a multichain future where DApps and tokens run on several blockchains all at once.

At the heart of the increase in multichain usage is the ability for users to move funds from one blockchain to another. This article provides a guide on how to use Hop Protocol to bridge assets in 2022.

Layer 2 protocols such as Optimism and Arbitrum and sidechains such as Polygon have become extremely popular due to the unattractive usage cost associated with Ethereum. Gas fees (transaction costs) on Ethereum have become very expensive while use cases like DeFi and NFTs continue to expand. This has made it difficult and simply unattractive for smaller investors to engage on the Ethereum network.

To solve various scalability issues and to increase adoption, builders and users have begun to opt for Layer 2 protocols and sidechains that reduce transaction costs considerably.

Cross-chain bridges like Hop Protocol make things easier by allowing users to swap assets from L1 to L2, L2 to L1, and L2 to L2.

What is Hop?

Hop Protocol connects several scaling solutions on a single platform while maintaining a smooth user experience during transactions.

Currently, Hop Protocol supports the transfer of funds in ETH, USDT, MATIC, USDC, and DAI from and to the Ethereum Mainnet, Polygon, Optimism, Arbitrum, and xDai (now Gnosis).

How To Move Assets On Hop

You need to have a wallet like MetaMask or Trust Wallet with funds to get started.

Moving funds from one chain to another can be confusing. You need to have the native gas token of the chain you are transferring to. For instance, if you want to transfer ETH to Polygon, you need to have some MATIC in your Polygon wallet and have ETH in your Ethereum wallet for the transaction to work.

Head Over to Hop

After getting your wallet ready with the funds on both ends (chains), you can now head over to Hop.

Connect Your Wallet

Next, you have to connect your wallet. Find the 'Connect Wallet' button in the top right corner and select your wallet of choice.

Choose a Network to Transfer Assets To and From

After connecting, you must choose the network to transfer your assets to and from. In this tutorial, we will transfer USDC from the Polygon network to the Optimism network as an example.

Enter the Amount to Transfer and Approve

After selecting the token you intend to transfer, enter the amount and click "Approve." You will receive a pop-up on your wallet to sign or confirm the transaction.

Receive a Transaction Confirmation

A pop-up with an estimated transaction completion time will show after confirming the transaction on your wallet.

Your funds will show up on the other network in a couple of minutes. You just finished bridging an asset from one Layer 2 platform to another on Hop Protocol.

How Does Hop Protocol Work?

The seamless experience on the front end has some inner workings you don't see while doing the swap. The platform has Bonders, who earn fees by providing liquidity. Technically, users send tokens to the Bonder on the source chain (where the asset is being sent from), and the Bonder sends the asset to the user on the destination chain (where the asset is being sent).

Hop protocol plays a vital role in this transaction by ensuring that Bonders send the tokens. No one will want a situation where tokens are sent to Bonders, but they fail to send the tokens to the destination chain.

The protocol uses special tokens called the hTokens. These tokens act as an accounting tool to ensure that all transactions are adequately fulfilled. hTokens can be moved through various chains from Ethereum to L2 protocols or from L2 protocols to Ethereum. The issue here is that moving hTokens from one layer to another can take a longer period of time which will be inconvenient for the user. Therefore, Bonders provide liquidity up front so users can instantly receive tokens while waiting until the hTokens are transferred.

Hop Protocol has built an important platform for Web3 infrastructure that makes cross-chain economic activities possible. Users can also provide liquidity and earn yield by visiting the pool dashboard.

Conclusion

Hop intends to add more chains to make cross-chain transfers easier. The latest addition is xDai (now Gnosis chain) which has brought the total number of supported chains to five.

Layer 2 protocols may continue to see a sharp rise in usage as more users look for a more affordable way to engage with decentralized finance, non fungible tokens, and the Metaverse. Bridges like Hop make this growth inevitable.

Here is a recap of the steps involved in using Hop Protocol:

  1. Go to Hop.Exchange.
  2. Connect your wallet (Trust Wallet, MetaMask).
  3. Select the token you want to transfer.
  4. Select the network you want to transfer to and from.
  5. Click "Approve" and "Send" and sign the transactions in your to complete the transfer.

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