# Thesis: Native layer 1 swaps are more user friendly than pegged asset bridges

## Security
* Pegged assets have value due to locked capital in a bridge. The creates a honey pot for hackers, which grows larger as economic activity betweem chains grows.
* The honeypot for native layer 1 swaps is the liquidity pools size, which need to be big enough for acceptable slippage. They are independent of economic activity.
* For pegged assets, risk increases with economic activity, for native layer 1 swaps there is finite risk
* Attack surface may be larger for native layer 1 swap with due to clients being run for each chain <mark>Is this the same for pegged bridges? I'm assuming they are less code intensive?</mark>

## Trust minimised for users
* As long as users hold the wrapped tokens, they take on the risk of hacks of the stored assets on the bridge. The wrapped tokens only have value because they are backed by those assets.
* The user only takes on risk during layer 1 cross chain swap as they hold a native token both before and after. LP's take on the risk in the L1 cross chain swap AMM model, and they are rewarded for this with fees.

## Fungibility
* Wrapping history must be tracked due to differing security gaureentees of bridges and chains, native swaps are fungible.
* Ideally, if a token wanted to be used in smart contracts on another chain, there would be native instance of that token on the other chain and a native L1 swap between chains used to transfer value. This would mean only 1 version of the token on each chain, ensuring fungibility.

## Capital efficiency
* Wrapped bridge capital efficiency is almost 1:1, put one in, get one out (minus security premium and fee)
* Native L1 swaps is less than 1:1, the secured capital in the AMM can facilitate many times that volume of swaps