• 4NTS GUILD

The Rainbow Bridge: FAQs and Answers By 4NTS

Updated: Aug 31



Recently the NEAR Team dropped a huge announcement:


The launch of the ETH ←→ NEAR Rainbow Bridge.


In itself, the Bridge holds the promise of providing a channel for the transfer of assets, data, and cross-chain calls. In context however, the Bridge signifies a monumental enhancement for the cryptocurrency industry: Seamless interoperability between two parallel blockchain ecosystems building the Open Web.


A simple review of the most common questions surrounding the Rainbow Bridge, as well as the context for its development, and its significance in the Macro Crypto environment helps contextualize this event:


  • What is the Context for the Rainbow Bridge?

  • What Are the Technical Components of the Rainbow Bridge?

  • Is the Rainbow Bridge Decentralized?

  • If I am a User What Can I Expect When Using The Bridge?

  • What Operations does the bridge execute on the backend, during a Bridge Transfer?

  • What is the Significance of the Bridge if I build on NEAR or Ethereum Right Now?

  • What, in principle, can be Transferred Across the Bridge?

  • What can currently be transferred across the bridge?

  • Who Pays for the Bridge Currently?

  • What is the Long Term Goal of the Bridge?

  • How Can I Get Involved in Developing the Bridge?

  • Who is involved in the “Hack the Rainbow” Hackathon?

  • What is the incentive to participate in the Rainbow Hackathon?

What is the Context for the Rainbow Bridge?


Third generation cryptocurrency projects are building refined and enhanced blockchain ecosystems that build upon the successes and challenges of previous projects. NEAR Protocol, incorporates Dynamic Sharding using Nightshade to provide scalability to it’s next-generation platform for decentralized applications. The Rainbow Bridge has been built by the NEAR Team to connect the NEAR blockchain to the Ethereum blockchain - the most popular dApp platform to date. Ethereum, while highly successful, is indisputably suffering from high gas fees as it works to implement the long awaited Ethereum 2.0 Upgrade to its network.


Ultimately, The Decentralized Web is evolving to the point that two massive parallel blockchain ecosystems can seamlessly interact with one another, to share assets, data transfers, and cross-chain calls. The Open Web is growing up!


What Are the Technical Components of the Rainbow Bridge?


At its core, the Bridge consists of the following components:


  • An Ethereum Light Client implemented on NEAR (Including an Ethereum to NEAR Relay Service)


  • A NEAR Light Client implemented on Ethereum (Including a NEAR to Ethereum Relay Service)


  • An Ethereum Prover implemented on NEAR, to verify Ethereum Events.


  • A NEAR Prover implemented on Ethereum, to verify NEAR Contract Executions.


  • Contracts enabled by Provers, for locking and minting assets on ETH and NEAR respectively (currently contracts are only available for ERC20 tokens).


  • A Watchdog Service For Challenging Headers from NEAR transactions on the NEAR Light Client in Ethereum (Due to the current latency of NEAR → ETH interactions - Note: Once EIP665 is accepted, Ethereum will have the Ed25519 signature available as an EVM precompile. This will make watchdog services and the 4-hour challenge window unnecessary.).


The respective relays and clients, move and maintain assets across the bridge, while the provers allow for the verification of events/contract execution results from the opposite blockchain. With this base level foundation, specific contracts can be written for different token standards to migrate back and forth between the different blockchains.


Is the Rainbow Bridge Decentralized?


As explained in the release blog, the rainbow bridge “does not require special permission to deploy, maintain, or use. Anyone can deploy a new bridge, use an existing bridge, or join the maintenance of an existing bridge without getting approval from anyone else, not even NEAR Foundation.” As such the Rainbow Bridge can be considered a fully permissionless and decentralized way to transfer assets between the Ethereum and NEAR blockchains.


If I am a User What Can I Expect When Using The Bridge?


For users interested in sending assets across the bridge, the experience is similar to other wallet transactions in Crypto:


  1. The User Provides Credentials

  2. The User Chooses a Beneficiary (address) and an Amount to send

  3. The User Initiates the transfer (as the blog details, “Either from RainbowCLI, Wallet, or other applications.”)

  4. Once the transfer has succeeded, the user is provided with visual confirmation on their interface.

Ta Da!


What Operations does the bridge execute on the backend, during a Bridge Transfer?


The example provided in the blog uses the classic characters of Alice and Bob. The basic idea behind the backend transfer can be summarized as follows when Alice transfers DAI to Bob from the Ethereum to the NEAR blockchain:


  1. A Token On Ethereum is Sent and Locked: The respective amount of DAI is transferred from Alice to the Tokenlocker that subsequently locks the tokens.


  1. Transaction is Confirmed on NEAR via Ethereum Client, and Submits Contract to Mint: Once the Ethereum Client receives the transaction of this transfer, it is then submitted to the MintableFungibleToken contract on NEAR.


  1. Transaction is Verified by the ETH Prover and nDAI is Minted for Bob: This contract then calls the Ethereum prover (on NEAR) which checks the transaction confirmation (on the Ethereum Client on NEAR). Once it has been verified, the MintableFungibleToken contract reads the Ethereum event and mints the respective amount of nDAI (nearDAI) for Bob.

Congratulations! That is it.


What is the Significance of the Bridge if I build on NEAR or Ethereum Right Now?


The Rainbow Bridge allows the NEAR and Ethereum blockchains to communicate with one another. Developers building on NEAR can access all existing assets and decentralized financial products existing on Ethereum. Developers on Ethereum, meanwhile, can easily migrate to NEAR if gas fees remain unfeasible, while “maintaining their Ethereum-native user base.” For more information see the thread by Alex Skidanov Here.


A core NEAR developer of the Rainbow Bridge, added this interesting point as well:




What, in principle, can be Transferred Across the Bridge?


In principle, full interoperability means that any transaction or statement from either blockchain can be verified by the other. According to Alex this “enables any asset transfers, arbitrary cross-chain calls and arbitrary data transfers”.


What can currently be transferred across the bridge?


In its current form, support only exists for transferring ERC20 tokens back and forth from Ethereum to NEAR. This is because different sets of contracts have to be built for different token standards (i.e. ERC721 tokens and native tokens).


Who Pays for the Bridge Currently?


In its current state, the Rainbow Bridge is maintained by the NEAR Foundation. The Team is currently carefully designing and incentive structure for those maintaining the bridge by paying for gas from header relays.


What is the Long Term Goal of the Bridge?


The Macro view here is key: The Web3 Ecosystem is developing - The Open Web is growing up with the goal of building a “Permanent, Ownerless, and Borderless Foundation” for connecting people all over the world. The Rainbow Bridge is a product meant to enhance the evolution and development of Web3 in a mutually beneficial and positive manner for both the Ethereum and NEAR communities.


How Can I Get Involved in Developing the Bridge?


The “Hack the Rainbow Hackathon” is going live in the coming weeks! Don’t Miss It. More Information Can be Found Here.


Who is involved in the “Hack the Rainbow” Hackathon?


Experts, educators, community members, and mentors from both NEAR and Ethereum will be collaborating to promote the evolution of the Open Web and the digital commons.


What is the incentive to participate in the Rainbow Hackathon?


“Expect over $50k worth of prizes for the best of the best.” :)


About 4NTS: 4NTS Guild is a rising NEAR Guild focused on connecting and communicating NEAR, its different projects, and the tremendous opportunity for entrepreneurs, contributors and other Guilds. Feel free to drop us a line at m@4NTS.com


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