Thread by @RobotDefi

#DeFi 101 for normies
Today we're going to talk about Bridging

This was inspired by my homie @DeFi_naly who put together an excellent newb-friendly thread on LPs.

And also by @0xLosingMoney who tweeted yesterday about how hard it was to explain bridging to a friend.

🧵/1

@DeFi_naly @0xLosingMoney OK, let's get into it.
This thread is for you to send to your grandma or other normie fam who just don't understand DeFi concepts.

Bridging...WTH is THAT?

DeFi natives know this is when you take an asset from one chain to another.

But let's simplify that a bit...

🧵/2

@DeFi_naly @0xLosingMoney First, let's imagine #crypto as actual currencies. Just like USD, JPY, GBP, etc.

Each blockchain is like another country with it's own native currency.

Now lets say you got your hands on some Euros.

🧵/3

@DeFi_naly @0xLosingMoney Maybe you did a job for someone in Europe. Who knows how you got it. The point is, you have some Euros, but let's say you live in the US.

You can't spend those Euros in the US. So how you gonna access the value of your money?

🧵/4

@DeFi_naly @0xLosingMoney You have to exchange the Euros for USD at a designated exchange station.

This is an imperfect illustration of Bridging. If you have $AVAX on the #Avalanche chain, for example, and you want to have it on the #Fantom chain, you need to bridge it over.

🧵/5

@DeFi_naly @0xLosingMoney Just like Euros in America, your $AVAX cannot be used on the #Fantom network until you bridge it (convert it into a usable currency on that network).

This turns your $AVAX into Wrapped $AVAX and allows it to be usable on the #Fantom network.

🧵/6

@DeFi_naly @0xLosingMoney Ok, so bridging a crypto from one chain to the next "wraps" it, effectively turning it into a usable currency on that chain, just like exchanging one country's dollar for another country's dollar allows you to spend your money abroad.

Got it.....but why? Why do this?

🧵/7

@DeFi_naly @0xLosingMoney If you want to explore a new chain, just like you want to explore a new country, you have to have a currency that you can use there.

If you have one type of crypto (dollar) you need to be able to use it on the new chain (country) so you gotta change it.

🧵/8

@DeFi_naly @0xLosingMoney The problem is, unlike with foreign currencies, you can't just swap your $AVAX dollars for $FTM.

That's because assets on one chain cannot be used on another. The technologies aren't compatible (in most cases).

So you have to wrap the crypto up in a compatible wrapper.

🧵/9

@DeFi_naly @0xLosingMoney Once your crypto from one chain is wrapped in a compatible wrapper for another chain, THEN it is usable, just like a foreign currency, on that chain.

You can go to exchanges and trade that wrapped currency for other cryptos.

I hope that was helpful for grandma.

🧵/10

@DeFi_naly @0xLosingMoney To read @DeFi_naly's thread about liquidity pools check that out here:

https://twitter.com/DeFi_naly/status/1526552574043856898?s=20&t=9D72xyO2JGRQR5DpkIAi5g

🧵/finis

@DeFi_naly @0xLosingMoney You can read the unrolled version of this thread here: typefully.com/RobotDefi/FUWF…