Token Bridge

How the Bridge works

The Bridge allows the transfer of assets between different blockchains using the Wormhole messaging layer or an alternate messaging layer depending on the source and destination chains. When a bridging transaction is initiated, emits a message from the source chain which is observed by a network of Guardian nodes and verified. After that, the message is sent to the destination chain for processing. This messaging system which is based on Wormhole is what enables cross-chain communication.
Smart contracts for the bridge are deployed on the different chains operates on and the Guardian nodes monitor the bridge smart contracts for onchain events each block. Something called a Verified Action Approval (VAA) is created by the Guardians when they verify and sign a message that is emitted from the bridge contracts. Then the VAA is relayed from the Guardians to the destination chain to process the message.
So when a user initiates a transfer of native tokens which are facilitated by liquidity pools from e.g. Ethereum to Algorand, the tokens are taken out of circulation by locking them on the Ethereum side and put into circulation by unlocking them on the Algorand side liquidity pool. Since it is not possible for tokens to cross over into different chains, utilizes smart contracts to lock these tokens on the Ethereum side and unlock the corresponding tokens on the Algorand side when the user initiates and signs the respective transactions - ensuring that the total global supply of the token doesn't change.
Here are some visuals for how the bridge works:
How the different components interact with each other for bridging