The Cross-Chain Bridges
Each Bridge is a link between two block chains. On the asset origin chain, the asset to be bridged is sent to a special SMPC wallet address and held securely there. This is the Decentralized Management Account. On the destination chain, a smart contract mints tokens 1:1 with those held in the Decentralized Management Account and sends them to the user's wallet. The opposite also happens when tokens are sent to the smart contract; they are burned and then the SMPC nodes release them on the origin chain.
The SMPC nodes perform several functions in linking an origin blockchain with a destination blockchain, completely autonomously and without human intervention :-
(a) When a new bridge between two blockchains is created, the SMPC nodes generate the Decentralized Management Account whose address is used to send assets to. These assets are held securely whilst cross-chain assets are minted on the destination chain. This address is only controlled by the SMPC nodes and not by human or any other Externally Owned Address.
(b) Also, when a new bridge between two blockchains is created, the SMPC nodes connect to a new smart contract on the destination chain for Wrapped Assets. This contract can be created by third party or the Multichain team. It is used to mint new tokens on the destination chain, or to burn them when assets are redeemed to their origin chain. This contract is either AnyswapV5ERC20.sol, or a contract adapted from this to include custom code required by a project, such as transaction tax etc.
(c) The MPC nodes monitor the Decentralized Management Account. When a new asset arrives there, it triggers the Wrapped Asset smart contract on the destination chain to mint tokens.
(d) If assets are redeemed, the Wrapped Asset smart contract is triggered by the MPC nodes to burn the tokens. The MPC nodes then release the assets from the Decentralized Management Account and send them to the user on the origin chain.
The wrapped asset token contract AnyswapV5ERC20 on the destination chain, which is a superset of the standard ERC20 type of contract, only allows MPC nodes network to mint assets. No other address is allowed to mint, to prevent a non-equivalence between assets held by the SMPC address and those wrapped assets created. For this reason, some common asset types are not suitable for Bridges, including elastic supply (or rebase) tokens.