Connect with us


Cross-chain bridges saw crypto worth $2 billion this year: Chainalysis

Attacks pose a serious risk to establishing trust in blockchain technology.

Cross-chain bridges are becoming increasingly attractive targets for hackers as more and more value passes through them.

What’s even more concerning is that the bridges are currently a prime target for North Korea-linked hackers, who Chainalysis says have stolen $1 billion worth of crypto so far this year. -currencies from bridges and other DeFi protocols.

For perspective, according to the South Korean government-run statistics office, the country earned around $89 million from official exports in 2020.

However, cross-chain bridges have defense mechanisms. In the event of a hack, they can use the transparency of blockchain technology to examine the movement of funds and, in most cases, prevent attackers from withdrawing their illicit earnings.

What are cross-chain bridges?

Cross-chain bridges are intended to solve the difficulty of ensuring interoperability between different blockchains.

A cross-chain bridge is a technology that allows users to transfer assets between blockchains. For example, the Wormhole cross-chain bridge protocol allows users to transfer NFTs and cryptocurrencies across the various smart contract blockchains, including Solana and Ethereum.

Although bridge designs may vary, most cross-chain bridge interactions involve users passing money into an asset to the bridge protocol, where it is then locked into the contract.

A counterpart asset on the chain to which the protocol links is then provided to the user in the corresponding amount.

In the case of Wormhole, clients often submit ETH to the protocol, where it is held as collateral, and then receive ETH that has been wrapped around the Wormhole token on Solana. This ETH is secured by the ETH that was sent as collateral and locked into the Wormhole contract on Ethereum.

Why are cross-chain bridges vulnerable?

Cross-chain bridges are desirable targets because they often include a central repository for money that supports “bridged” assets on the receiving blockchain.

Whether money is held in a smart contract or with a central depository, it becomes a target wherever it is held.

Many new designs are being created and evaluated, and successful bridge design remains a technological problem that needs to be solved.

As best practices improve, these different designs provide unique attack vectors that malicious actors can take advantage of.

What actions can the industry take?

Centralized exchanges were the most frequent hack targets in the industry until a few years ago.

Today, centralized exchanges are rarely successfully hacked. This is because these exchanges place a high priority on security, and hackers are constantly looking for the newest and most exposed services to target.

Extremely rigorous code audits should become DeFi’s gold standard for those who design protocols and for the investors who evaluate them.

While not foolproof, it could be a useful start to solving problems like these.

The most reliable and secure smart contracts can eventually be used as building blocks by developers.

Bridges and other cryptocurrency providers should spend money on security precautions and training.

For example, sophisticated social engineering techniques that prey on people’s tendency to trust and neglect in order to infiltrate corporate networks have long been a favorite attack strategy, especially among hackers. with ties to North Korea.

Crews should be trained in these hazards and the warning signs.

In a major hack involving a cryptocurrency project, impersonators drained the Nomad cross-chain bridge of around $191 million on Tuesday, nearly draining funds from the wallet.

A day later, $8 million in user funds were hijacked from major Internet-connected “hot” wallets, including Phantom, Slope, and TrustWallet, by unknown hackers, making the Solana ecosystem the target of the latest cryptocurrency hack.

Catch all the trade news, market news, breaking news and latest updates on Live Mint. Download the Mint News app to get daily market updates.

More less

To subscribe to Mint Bulletins

* Enter a valid email

* Thank you for subscribing to our newsletter.

#Crosschain #bridges #crypto #worth #billion #year #Chainalysis

Click to comment

Leave a Reply

Your email address will not be published.