Much like blockchains themselves, bridges can be operated on a spectrum of decentralization. The bridges outlined above fall into two categories: federated and trustless.
A federated bridge is run in a similar way to a private or permissioned blockchain. The project establishes a set of criteria for which someone can qualify to become part of the federation that manages and oversees bridge transactions. For example, in Wanchain, specialized nodes called “storemen” lock tokens on the Ethereum blockchain using secure multiparty computation. The equivalent value of tokens is minted on Wanchain, and when the user wants to move the assets back onto Ethereum, a threshold of storemen must provide their fragment of the secret key.
A trustless bridge can operate through a decentralized network of agents. Unlike the federated model, anyone can join the network as an agent, and agents are incentivized to ensure that bridge transactions are validated correctly. For example, the Syscoin bridge uses a network of agents that stake Ether and earn fees from bridge transactions, which are grouped into superblocks. If any agent believes that another isn’t acting in the interests of the network by submitting invalid superblocks, they can raise a challenge. If the challenge is upheld, the challenger wins 3 ETH from the submitter. Conversely, the challenger loses 3 ETH if their challenge is deemed unfounded.