What is a Corridor?

Overview

A payment corridor refers to a predefined route or pathway used to transfer assets from a source network and token to a destination network and token. Each corridor is characterized by specific attributes such as different costs, speed, and type (e.g., same chain or cross chain). These corridors are used to determine the most efficient and cost-effective way to transfer assets across different blockchain networks.

What Makes It a Corridor?

The term "corridor" is used because it implies a defined and reliable pathway for moving assets between two distinct points—similar to a transportation corridor that connects two locations. In cross-chain payments, these "points" are different blockchain networks. Here's what makes it a corridor:

1. Defined Source and Destination Networks & Token-Pairs: A payment corridor specifies the originating blockchain (source) and the target blockchain (destination) and token-pairs.

2. Interoperability: To function as a corridor, there need to be protocols or mechanisms that facilitate the transfer of assets across blockchains.

3. Liquidity Provision: A payment corridor typically requires liquidity, meaning that there are sufficient funds available to facilitate transfers between the chains. This liquidity (if needed) is often sourced from specialized parties known as (LPs) Liquidity Providers or Fillers.

Here's an example table of cross-chain payment corridors:

Corridor Type	Source Chain	Source Token	Destination Chain	Destination Token
Cross-Chain	Ethereum	USDC	Polygon	USDC
Cross-Chain	Optimism	USDC	Base	USDT
Cross-Chain	Solana	PYUSD	Ethereum	USDC
Cross-Chain	Arbitrum	USDe	Base	USDT
Same Chain	Tron	USDT	Tron	USDD
Same Chain	Base	WETH	Base	DAI
Same Chain	BSC	BUSD	BSC	USDC
Same Chain	Avalanche	EURC	Avalanche	EURC