The POA cross-chain bridge serves as a method of transferring POA native tokens from the POA Network to the Ethereum network in a quick and cost-efficient manner. The POA to Ethereum transfer will result in the creation of a newly minted token on the Ethereum blockchain known as POA20. The POA20 token displays the exact same properties as the standard ERC20 token and allows it to be used in all the same places that offer ERC20 compatibility. Think of it as the official POA token on the Ethereum network.
POA20 Tokens were minted to prove cross chain bridges can work in a safe and secure manner allowing 2 standalone blockchains to interact with each other. We believe the interoperability technology we’ve been able to develop helps open up a whole new avenue of solutions that can be offered to our users. By connecting blockchains with these bridges you allow for a variety of new use cases that never existed before. POA Network truly believes cross chain bridges is a critical step in the right direction as we aim to solve the problem of scalability and connectivity.
The ERC20 to ERC20 Bridge allows users to transfer a token from one Ethereum blockchain network to another Ethereum blockchain network. It could be considered as a form of atomic swap when users can swap token "X" in Network A to token "Y" in Network B. The bridge may be utilized by projects that would like to shift circulation of their tokens from the mainnet where transactions are quite costly and could take some time due to traffic congestions to a sidechain with lower gas price and shorter block generation time.
This bridge provides the ability to transfer DAI tokens from the Ethereum network over to xDai Chain. This process occurs by locking the DAI token(s) and then minting the same amount of xDAI token(s) on the xDai Chain. It’s important to note that this DOES NOT mean there will be more DAI tokens added to the circulating supply. The existing amount of circulating DAI tokens will stay the same and simply be distributed across two networks: Ethereum & xDai Chain.