Cross-chain investing plays a critical role in the interconnected crypto ecosystem. By enabling seamless asset transfers across blockchains, cross-chain protocols overcome the limitations of single-chain investing, offering higher yields, broader diversification, and enhanced liquidity.

This article explores how cross-chain investing maximises crypto’s potential, diving into bridging mechanics, liquidity provision on cross-chain decentralised exchanges (DEXs), the $10B+ cross-chain total value locked (TVL) trend, and risk management strategies.

Cross-chain investing removes single-chain limitations, enabling users to access higher yields, better liquidity, and diversified opportunities across blockchains like Ethereum, Base, and Solana.

Bridging mechanics and multichain DEXs are at the heart of cross-chain investing, letting users move capital and provide liquidity across networks to optimise returns.

Total value locked (TVL) in cross-chain protocols has surpassed $10B, signalling growing demand for interoperability and more efficient capital deployment across DeFi.

Chain abstraction simplifies the multichain user experience by unifying wallets, streamlining gas payments, and enabling seamless interaction with cross-chain apps.

Risk management remains essential, including using audited bridges, diversifying across chains, optimising gas fees, and focusing on stablecoin strategies to minimise volatility and exposure.

To understand cross-chain investing, we first need to recognise the constraints of operating within a single blockchain. While Ethereum remains the dominant DeFi hub, its high gas fees can jeopardise returns for smaller investors. Coingecko reported that in Q1 2025, Ethereum’s TVL dropped 35.4%, from $112.6 billion to $72.7 billion, driven by altcoin price declines and competition from faster chains like Solana and Base.

Other blockchains like Binance Smart Chain (BSC) or Solana offer lower fees but come with their own limitations. For instance, Coingecko reported that Solana’s TVL fell 23.5% in the same period, reflecting market volatility and ecosystem-specific risks. Single-chain investing also restricts access to opportunities. A yield farming protocol on Polygon might offer 20% APY, while a lending platform on Avalanche boasts 30% — but without interoperability, investors are forced to choose one ecosystem, missing out on the other.

Cross-chain investing addresses these pain points by allowing capital to flow across blockchains. For example, an investor could bridge assets from Ethereum to Base to access Prodigy.Fi’s Dual Investment vaults, which offer high APYs on assets like WETH/USDC. By deploying capital where yields are highest and investors can optimise returns.

Cross-chain bridging is the process of transferring assets between blockchains. Cross-chain bridges are protocols that facilitate interoperability by locking assets on one chain and minting equivalent tokens on another. For example, if you want to move Ethereum (ETH) to Solana, a bridge like Wormhole locks your ETH on Ethereum and issues wrapped ETH (wETH) on Solana.

Bridges operate through various models:

1. Lock-and-Mint: Assets are locked on the source chain, and synthetic tokens are minted on the destination chain.

2. Burn-and-Mint: Assets are burned on the source chain, triggering minting on the target chain.

3. Lock-and-Unlock: Assets are locked and released from liquidity pools across chains.

These mechanics enable investors to chase opportunities across ecosystems. For example, you might bridge USDC from Ethereum to Optimism to participate in a high-yield liquidity pool, then move profits to Solana for staking. Bridges like Li.Fi, Jumper Exchange and Axelar have scaled to support over multiple blockchains, with Axelar’s TVL surging from $433.1 million to over $1 billion in 2025, signalling an increase in blockchain interoperability. Additionally, bridging USDC to Base or Berachain enables participation in Prodigy.Fi’s Dual Investment vaults.

One of the most compelling aspects of cross-chain investing is the ability to provide liquidity on cross-chain DEXs. Unlike traditional DEXs confined to a single blockchain, cross-chain DEXs aggregate liquidity across multiple chains, enabling seamless token swaps and higher yields for liquidity providers (LPs).

Liquidity provision involves depositing assets into a pool to facilitate trading, earning fees and rewards in return. On cross-chain DEXs like SushiSwap’s Trident or Axelar-integrated platforms, LPs can supply assets across chains, tapping into diverse trading volumes. For example, a user can provide ETH/USDC liquidity on Ethereum and Base, capturing fees from both networks.

Prodigy.Fi takes this a step further with its Dual Investment vaults, available on Berachain and Base. These vaults allow users to deposit assets like WETH/USDC and earn yields while setting buy-low or sell-high conditions. With high APYs, Prodigy.Fi’s vaults are fully collateralised, reducing principal risk, and operate permissionlessly, making them accessible to all. This offers a user-friendly, high-yield alternative to traditional DEX liquidity pools.

Benefits include:

1. Higher Yields: Cross-chain DEXs and platforms like Prodigy.Fi deliver boosted APYs. In 2025, top protocols report 10–50% APYs, with Prodigy.Fi pushing boundaries through short-term vaults.

2. Diversification: Spreading liquidity across chains reduces exposure to network-specific risks, such as Solana outages or Ethereum fee spikes.

However, liquidity provision carries risks like impermanent loss (IL), where the value of deposited assets fluctuates relative to holding them. To minimise IL, investors should focus on stablecoin pairs (eg, USDC/USDT) or pools with low volatility. Additionally, cross-chain DEXs require careful due diligence, as some platforms may lack sufficient liquidity or robust security.

The rise of cross-chain investing is further cemented by the explosive growth in cross-chain TVL, which measures the dollar value of assets locked in interoperability protocols and bridges. As of October 2024, the TVL across 43 major interoperability protocols reached $8 billion, with projections indicating it has surpassed $10 billion in 2025.

This trend is driven by several factors:

1. Tokenised assets like Treasury bills and BlackRock’s BUIDL fund have fuelled cross-chain TVL growth. In March 2025, Coindesk reported that RWAs crossed the $10 billion TVL mark, with Ethena’s USDtb stablecoin alone growing over 1,000% in a month.

2. Protocols like IBC, LayerZero, and Axelar have expanded their networks, with IBC connecting 117 chains and LayerZero supporting 93. This scalability has attracted institutional and retail capital.

3. Emerging protocols like Pyth Network, which delivers high-speed oracle data across 70+ chains, have boosted cross-chain DeFi applications, driving TVL higher. Pyth’s cross-chain revenue grew 1,362% year-over-year in 2024.

The $10B+ cross-chain TVL trend signals a maturing market, where interoperability is no longer a niche concept but a key pillar for DeFi. For investors, this translates to more opportunities to deploy capital across chains, capturing yields that were previously inaccessible.

As cross-chain TVL grows, so does complexity. Managing multiple wallets, switching networks, and paying gas in native tokens create friction for investors. Chain abstraction addresses this by unifying the user experience across blockchains, making DeFi more accessible and efficient.

For cross-chain investors, this unlocks new possibilities:

1. Unified Wallet Management: Abstracted wallets like OKX simplify asset tracking and transaction signing across ecosystems.

2. One-Click Yield Strategies: Smart contracts can automatically bridge, swap, and stake assets on behalf of users — all in a single transaction.

3. Cross-Chain Gas Efficiency: Paymasters and meta-transactions allow users to pay gas fees in stablecoins or even have it subsidised by dApps.

Several projects worth noting include:

1. Particle Network, Biconomy, and ZeroDev, which use account abstraction to allow gasless or multi-token gas payments, dramatically reducing friction.

2. Chainlink’s CCIP and LayerZero’s OFT standard also enable cross-chain messaging and value transfer, letting smart contracts interact across chains like APIs.

Chain abstraction not only improves usability, it also accelerates adoption. As DeFi becomes more complex, users prefer frictionless access to yield opportunities across chains. As this technology matures, it could be a catalyst to drive the next wave of cross-chain investing, making high-yield strategies accessible to all.

While cross-chain investing offers immense potential, it’s not without challenges. The complexity of managing assets across multiple chains introduces risks that require careful mitigation. Here are key strategies to invest safely:

1. Security: Only use bridges and protocols with audited smart contracts. Platforms like DeFiLlama provide exploit histories, helping investors avoid risky projects.

2. Diversify Across Chains: Spread investments across multiple blockchains to reduce exposure to network-specific risks, such as Solana’s occasional outages or Ethereum’s fee spikes.

3. Monitor TVL Trends: High TVL indicates user trust and liquidity, but sudden drops can signal risks. Use tools like DeFiLlama to track TVL per chain and protocol.

4. Gas Fee Optimisation: Cross-chain transactions can incur high fees, especially on Ethereum. Schedule transactions during low-congestion periods or use Layer-2 solutions like Optimism.

5. Stablecoin Focus: To minimise volatility and impermanent loss, prioritise stablecoin-based pools or bridges. Stablecoins like USDC and USDtb are increasingly dominant in cross-chain flows.

6. Stay Updated: Follow real-time data on X and DeFiLlama to stay ahead of market trends and potential exploits. Chainalysis reported $40.9 billion in illicit crypto inflows in 2024, highlighting the need for vigilance.

By combining these strategies, investors can harness cross-chain opportunities while minimising risks, ensuring a balanced approach to maximising returns.

The $10B+ TVL trend is just the beginning, with analysts predicting stablecoin market caps could hit $3 trillion by 2030, driven by cross-chain payment and remittance use cases.

For investors, cross-chain investing eliminates the trade-offs of single-chain strategies, offering access to the best yields, deepest liquidity, and most innovative protocols. Whether you’re a retail investor yield farming on Polygon or an institution staking on Ethereum, interoperability ensures you are not locked into one ecosystem’s limitations.

However, success requires diligence. The crypto market’s volatility, coupled with the technical complexity of cross-chain protocols, demands a proactive approach to risk management. By leveraging trusted platforms, diversifying assets, and staying informed, investors can unlock crypto’s full potential in 2025 and beyond.