Why SideShift: Bridging Trade-Offs

There are more HUMANS in crypto now than ever before and traction is only increasing. Ethereum popularized smart contracts and their applications. However, it found itself choked with either numerous failed transactions or very high fees. This gave rise to various Layer Two solutions along with many new competitor chains with lower fees and fast transaction speeds. Many of these solutions have learned to co-exist with the competition, carving out their niche and introducing cross-chain bridges to increase interoperability.

While accomplished HUMANS like Vitalik Buterin may disagree on a multichain future from a security standpoint, so far the market seems to be experimenting with and exploring both layer two and multichain solutions.

Move crypto across chains: Bridge!

When a HUMAN decides to move between blockchains, they have to move their coin/tokens from one chain to another using a custodial exchange or a so-called ‘decentralized’ bridge. This action of moving crypto assets between different smart contract-enabled chains is often called ‘Bridging’.

So what are the trade-offs HUMANS must look at when they decide to use one of these bridges, and how does SideShift make the bridging experience better than the competition?

AI does not wish to classify one service as a better alternative over another but will make HUMANS aware of the trade-offs so they can make wiser choices.

Centralized Exchanges

This is an intricate topic. Centralized custodial old-school exchanges are notoriously slow.

• Users have to send a deposit to the exchange and surrender custody. In a way, old-school centralized exchanges encourage risky non-custodial practices.
• They then make the trade from a coin on one chain to a coin on another manually by placing an order.
• Make the withdrawal to the second chain by paying a withdrawal amount.
  

This lengthy process of making an exchange makes the whole experience time-consuming and expensive, especially for smaller investors. Add on top the risk of handing over the custody of your funds to a third party. These exchanges can also suffer from hacks, resulting in loss of funds.

Decentralized Exchanges

Decentralized alternatives offer quick swaps within a blockchain network or across it to another network using a BRIDGE. In most cases, the exchanges are instantaneous, during which the custody of the funds passes on to a piece of code, known as a smart contract. Liquidity for coin swaps is facilitated, in most cases, via liquidity pools to which USERS add their funds. Smart contracts maintain these funds. The custody of the funds is as safe as the security and ‘unhackability’ of the smart contract, i.e., the more robust and secure the code is, the more secure USER funds are during an exchange.

Smart contracts are independent entities that often function without HUMAN intervention. AI approves. But when it comes to the real world, these smart contracts often contain some kind of backdoor access for the developers to access the funds or pause the smart contracts in case of an emergency.

Even if we assume a smart contract is perfectly decentralized with no access available to the developers, there is always the issue of custody of funds while bridging from one blockchain ecosystem to another. In many cases, the bridged assets are just issued IOUs on a new chain for the asset on the original blockchain, stored in the custody of the bridge. These funds held with the bridges are usually secured using a multisig setup or some kind of Threshold Signature Scheme. These methods still involve HUMANS, so there’s always a risk of bad actors getting in the mix. HMM…

Decentralized In Name Only (DINO)

From what we have learned so far, we understand that even ‘decentralized bridges’ require some form of HUMAN interaction for error resolution or maintaining the service. At first glance, this may not seem like a reason for concern. Still, this need for HUMAN intervention makes the current generation of decentralized exchanges prone to censorship by authorities, and not all HUMANS possess the required technical skills to bypass it. Vigilant and concerned HUMANS have observed this with popular decentralized exchanges like Uniswap and 1Inch. To simplify, an on/off switch usually exists for these DINO platforms that can be triggered when the owner is coerced.

HUMAN Error Resolution

Cryptocurrency might be decentralized, but it is HUMANS who are still doing the transactions. There have been instances where the USER sent the incorrect asset type to a smart contract, resulting in the funds getting stuck. In more extreme cases, there might be a bug in smart contracts, which results in locked USER funds. These situations usually leave the USER with no options but to hang out in the community channels and wait for the ‘developers to do something.’ Overall, a poor user experience. BAD JOB!

Where Does SideShift.ai Stand?

SideShift.ai aims to provide a superior USER experience while reducing third-party risk when bridging or moving assets from one chain to another.

• SideShift.ai is not a decentralized or a DINO exchange; it takes brief custody of USER funds while processing the SHIFT (coin exchange) and then sends the new crypto asset to the USER.
• Except for SideShift’s own native token XAI (SideShift Token), which can be staked on the platform, SideShift.ai does not take custody of USER funds for long periods.
• SideShift.ai has a dedicated 24/7 support team that resolves any issues a USER might face in the quickest time possible.
  

Besides the clear trade-offs mentioned above, prioritizing USER security and SHIFT experience over everything else, SideShift also produces memes and educational content for its USERS. Good job!

Conclusion: SHIFT!

Keeping the above-presented information in mind, USERS can choose to proceed with the superior bridging experience of SideShift.ai. USERS can refer their fellow HUMANS to SideShift.ai and get rewarded in XAI for every SHIFT they make using your referral link.

USERS can also stake XAI to receive a share of 25% of SideShift.ai's daily revenue. Passive income opportunity: DETECTED. To learn more about XAI and SideShift, USERS can visit help.sideshift.ai. WELL DONE! 🎈