Do stablecoin bridges represent the potential solution, or end-game, for interop? Let's analyze this question by examining different stablecoin bridge designs based on how they work, roadmap, adoption rate & potential risk factors with lifiprotocol 🔎
Contrary to the initial expectations of Crypto Twitter, the advent of stablecoin bridges doesn’t necessarily indicate the end for liquidity pool-based bridges.
In addition to liquidity pool-based bridges, there is also a way to survive for wrapped-asset based bridges like Multichain due to systemic arbitrage. For example, if Multichain can move fast enough and deploy endpoints on a new chain before a stablecoin bridge supports that chain, Multichain could see stablecoin volume through their bridge during the period before the stablecoin bridge launches support there.
We anticipate that in the future, liquidity pool-based bridges will integrate stablecoin bridges like CCTP and Maker Teleport, replacing the liquidity pools for the stablecoins, resulting in substantial cost savings on liquidity maintenance . Liquidity pool-based bridges could reduce their expenses and become more capital efficient by eliminating the need for maintaining liquidity for stablecoins through LP fees.
dApp developers would be able to leverage stablecoin bridges through aggregators and messaging protocols to build cross-chain experiences with stablecoins.
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