The total value locked in cross-chain bridges has seen significant growth over the past 2 years. In January 2021 the TVL was less than $3.5 billion and today its suppressing the $12 billion benchmark. By the way, at its peak in mid-2022, the total value locked in cross-chain bridges was over $26 billion.
The increase in the use of cross-chain bridges as a tool for managing transactions between different blockchains, networks, or layers has presented new challenges for finance teams.
At Tres Finance we have been working with 20+ finance teams at different Web3 and crypto companies reviewing how they engage with bridge activity. These were the challenges they highlighted:
An NFT marketplace that operates on both Optimism and Polygon networks has sold two NFTs for 1 ETH each. The first trade on Optimism generated fees, with ETH priced at $3,800 at the start of the year and $2,800 three months later. However, as ETH is not a native currency on the Polygon network, the fees were received in WETH.
On Sep 1st, 2022, the NFT marketplace transferred 1 ETH with Plasma Bridge to the Ethereum network and from there made a payment to an external vendor’s Coinbase account.
As seen on the left side (case #1), a demonstration of the NFT Marketplace's FIFO stack will highlight the consequences of failing to manage a unified ETH stack across networks.The demonstration on the right side (case #2) will show how TRES processes the FIFO stack, emphasizing the benefits of managing it across networks.
A difference in the method used can have a major impact on the realized gain/loss and impact your yearly performance and tax calculation.
Tres Finance is the only platform that can help you manage these activities properly.
Overcoming the challenges mentioned at the start is crucial for managing a unified cost-basis stack. Tres Finance simplifies this process using automation and offering a crypto monitoring platform that includes the following features: