With the recent hack on the Harmony Horizon bridge, it's time we give our thoughts on cross-chain bridges with wrapped asset mechanisms and the fundamental flaws behind how they work.
Cross-chain communication, simple bridges, and million-dollar hacks. What is the solution?1) Over the past two years alone, there have been many bridge hacks, such as in February 2022, when there was a Solana to Ethereum bridge called "Wormhole" that had a major 320 million dollar hack.
2) The attack was possible due to an exploit that allowed the hacker to create a valid signature to sign a transaction. This made it possible for them to mint 120,000 wrapped ETH (worth $325 million at the time) on the Solana blockchain to then swap to and sell in native ETH.
3) Then there was the Axie Infinity Ronin bridge, which was used to transfer assets between the game's Ronin side chain and the Ethereum network.
4) Unfortunately, it was reported that 552 million dollars in USDC and ETH were drained from the protocol, and this was reported to be caused by stolen private keys that were then used to sign transactions from five of the validator nodes on the network.
5) Just a few days ago, news came out about the $100 million Harmony cross-chain bridge hack. They have not clarified how the funds were stolen yet, and we will be watching this closely. However, bridge hacks have been happening over and over again now, so enough is enough.
6) We need other solutions because these simple bridges are clearly failed experiments. Here is where we come into the picture. How is Fibswap Dex different from these cross-chain bridges?
7) The space needs a solution to remove the requirement of trust in a centralised entity in order to achieve value transfers between chains. This is what Fibswap is doing.
#Fibswap DEx is an interoperable multi-chain bridge system with a smart algorithm that allows people to cross-chain swap true native assets (and any token) across 7 different chains. Most bridges hold the true asset and then mint a wrapped version on the destination's chain.
9) With Fibswap, intermediaries are removed. No additional trust layer is required. You are cross-chain swapping without a centralised authority. This is done by cross-chain communication and can be described as generic messaging between chains.
10) How is that possible? To understand this, we need to take a look at IBC (inter-blockchain communication protocol). IBC took years to code and is an important milestone to achieving interoperability. It connects blockchains trustlessly.
11) Each blockchain validates the other blockchain’s state. You can do that by relaying block headers plus verifying them in the chain through Merkle proofs. In short, you result in cross-chain communication.
12) We need cross-chain communication; however, we need to use truly trustless solutions. This is how the space will survive and thrive, and only then will regular bridge hacking be a thing of the past.
More information at
https://twitter.com/FibSwap/status/1540667498319810560/photo/1
