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DeFi security: How trustless bridges can help protect users

Trustless bridges enable cross-chain transfers without needing a centralized custodian, potentially making it a safer option for interoperability.

The blockchain bridge allows decentralized Finance (Defi) customers to apply the same OTP across several blockchains. For example, traders can also use dollar coins (USDC) in ethernet or Solana blockchain to interact with these decentralized applications (Dapp) on the Internet.

Because these agreements may be more convenient for Defi consumers, they face the risk of being used by hackers. In the past year, for example, jumping Bug Bridge-the most popular cross-chain landing password bridge among Solana, Ethernet Square, landslides and other companies-has been hacked, with cyber attacks stealing more than $321 million worth of Weth, the largest hacking in Defi's history at the time.

More than a month later, on March 23, 2022, the Luoning Bridge-the main chain of Axie Infinity's Ethernet Square-was attacked by the network for more than $620 million, and on August 2nd, the bridge of the Huns was attacked for more than $190 million. Between 2020 and 2022, cross-link bridges were stolen in excess of $2.5 billion.

Untrusted bridges, which are often referred to as unmanaged or decentralized bridges, can improve the security of users' cross-chain transmission.

What is block chain bridge?

A cross-chain bridge is a technology that allows assets or data information to be pushed from one blockchain Internet to another. This bridge allows two or more separate block chains to talk to each other and share data. The interoperability provided by cross-link bridges enables the migration of assets from one Internet to another.

Most bridging mode technologies use blockchain intelligent contracts in two blockchain chains so that cross-chain trading can be realized.

Cross-chain bridges can move many assets, such as digital currency, data dynamic passwords, and other data information. The use of this bridge makes it easier for different types of blockchain Internet to coordinate, and users can use the unique functions and features of each Internet more easily.

Reliable and untrusted bridges

When it comes to bridging mode agreements, there are two main types, centralized (reliable) bridges and decentralized (untrusted) bridges. Reliable bridges are managed by centralized physical lines, which are stored once the dynamic password is transferred to the bridge. One of the main risk servers of the escrow bridge is downtime (centralized escrow), which makes it easier to become a target for hackers.

Unlike the application of dynamic passwords for centralized fund custodians to migrate across block chains, bridges cannot be trusted to apply intelligent contracts to complete this process.

Intelligent contracts should implement some automated procedures for manipulation after meeting the conditions. As a result, unreliable bridges are seen as a more secure choice because each user saves the management of his or her OTP during transmission.

However, if the smart contract code has system vulnerabilities that the development team cannot identify and recover, it is still likely to be at risk without a trust bridge.

Pascal Belan, a blockchain researcher and key developer of Nimiq, a payment protocol for blockchain, told Cointelegraph, "in general, applying cross-chain bridges leads to more risk than using a single blockchain."

The attack surface is enhanced mainly through block chains, hidden fund custodians and smart contracts. There are various types of cross-chain bridges, and there are different measures at these levels of risk. He continued:

Cross-chain bridges of course involve two or more block chains and generally use different security policies. Therefore, the security of bridging mode assets lies in the weaker block chain involved in bridging mode. For example, if one of the block chains is damaged, it is likely to repair cross-chain swaps in one chain, but not in the other-causing asset misalignments.

Berrang also describes the vulnerability associated with bridging mode assets locked in the bridge. "assets are generally stored or locked in a central point, forming a single cause of failure. Depending on the type of bridge, this asset is exposed to different risks: in bridges under smart contracts, incorrect contracts can make bridge assets worthless.

An example may be to allow endless production to create a new bridge mode OTP error. If the fund custodian misbehaves or his keys are stolen, the bridge operated by the trusted fund custodian may face counterparty risk.

Jeremy Musighi, head of market-making Balancer growth for automated technology, feels that the extra risk depends on the diversity of the block chain bridge, she told Cointelegraph. "the cross-chain bridge comes with a lot of major risks. Security is one of the biggest risks; because of the complexity and difficulty of completing cross-chain bridges, they are prone to errors and system vulnerabilities, which can be exploited by people who deliberately act personally to steal assets or run other deliberate actual operations.

Musighi also mentioned that scalability challenges add further risks to the whole process of bridging mode, he said: "another risky scalability, because cross-chain bridges may not be able to handle a lot of total traffic, may lead to higher latency and user costs."

Protect the bridge from attack

Real estate developers can implement several kinds of security measures to prevent cross-chain bridges from being invaded by hackers, which help to ensure the security, confidentiality, integrity, authenticity and effectiveness of the relocated assets.

One of the most important countermeasures is to ensure that the intelligent contract code, which is the core of the cross-chain bridge, is very secure and has no system loopholes. This can be achieved through timely network security audits, system vulnerability incentive programs, and code reviews, which help identify and recover potential security issues.

Another countermeasure that developers can adopt is to use encryption techniques, such as electronic signatures and hash functions, to ensure the security of asset and data communications between different block chains of the Internet. This helps to ensure that the transferred assets are protected and that all deliberate individual actors cannot interfere with the entire migration process.

In addition, timely network video surveillance is particularly important to detect abnormal thematic activities and prevent attacks. According to the monitoring system, developers can detect all security risks and take reasonable measures to solve the problem before causing any harm.

Ultimately, the development and deployment of secure cross-chain bridges must follow good practices, such as security numbering practices, evaluation and tuning, and security deployment. According to this, real estate developers can help ensure the safety and stability of the cross-chain bridge.

To avoid cross-chain bridge hacking requires security code, encryption technology, strong consensus mechanism, network video surveillance and good practice.

Is there a stronger solution without a trust bridge?

Only when the intelligent contract code is fully audited to ensure that there will be no system vulnerabilities, the untrusted bridge can provide a high safety solution to the cross-block chain bridging mode assets.

The important security benefit of the untrusted bridge is that the customer maintains and escrow the dynamic password during the whole process, and the intelligent contract undertakes the whole process of migration. In addition, because there is no server downtime, the lack of a central authority that locks dynamic passwords will make it difficult for the bridge to attack.

Musighi told Cointelegraph: "I generally think that an untrusted bridge is more secure than a reliable bridge, because it runs completely transparent and relies on fragmented Internet to verify and drive asset migration between chains, while reliable bridges depend on centralized third parties, which means that network hackers can attack with a combination of individual causes of failure and dense attack surfaces."

"No trust bridge is easier for financial audit and has the significant benefit of minimizing trust. As a result, many centralized bridges also use (simpler) smart contracts, so it can be felt that untrusted bridges are a low-risk but not risk-free choice.

With the improvement of scattered financial areas, real estate developers must take additional measures to ensure the safety of cross-chain bridges. However, with login password customers becoming more and more interested in their own storage and blockchain technology, no trust bridge may become more and more popular.

by wjb news
© 2023 WJB All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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