How To Make Cross-Chain Tokens Fungible Again: Part I

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This two-part report explores ERC-7281: a new proposal to make cross-chain tokens fungible.

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The article examines the challenges of cross-chain token fungibility, focusing on issues like fragmentation and the problem of receiving non-fungible ERC-20 tokens during bridging. It explores existing approaches to cross-chain asset fungibility, analyzing their effectiveness and limitations, as well as bridging mechanisms like lock-and-mint, burn-and-mint, atomic swaps, and intent bridging. Additionally, the article highlights the potential of XERC-20 to solve these issues by introducing a unified framework that ensures fungibility for bridged ERC-20 tokens.