SoK: Crosschain Token Bridges and Risk

Despite the importance of token bridging with $2 billion USD stolen from bridges in 2022, there is a gap in existing literature of token bridges and the risks they pose to the wider ecosystem from a financial standpoint. In this Systematization of Knowledge, we bridge the gap in literature with a focus on token bridging and Liquidity Networks (LNs). We provide an outline the token mechanisms, their risk profiles, and the potential contagion these mechanisms pose, and a review of potential methods to mitigate contagion in the case of token price damage.