Are bridge transactions custodial?

Yes, bridge transactions are custodial. Rhino.fi operates as a liquidity bridge where we hold liquidity pools on all supported chains. When a user makes a deposit, Rhino detects the funds on the source chain and then releases our own liquidity to the destination address.

This means that during the incredibly fast bridging process, user funds are held by Rhino's system before being released on the destination chain. The bridge follows a structured process where funds must be sent to Rhino's bridge contracts, detected and confirmed, before the equivalent amount is released from Rhino's liquidity pools on the destination chain.