In a high-profile tweet last week, Vitalik Buterin voiced his opposition to the use of cross-chain solutions by Ethereum and other blockchains, in favor of a multi-chain future.
My argument for why the future will be *multi-chain*, but it won’t be *cross-chain*: there are fundamental limits to the safety of bridges that cross multiple “sovereign areas”. From https://t.co/3g1GUvuA3A: pic.twitter.com/tEYz8vb59b
— vitalik.eth (@VitalikButerin) January 7, 2022
For Buterin, cross-chain bridges are not ideal because they increase security risks in the asset transfer process. This trade-off with security occurs because the attack vectors of assets are increased over a larger network surface as they are moved across an increasing number of chains and decentralized applications with different security principles.
Whether your ETH is contained in Ethereum is solely dependent on Ethereum’s network security validation. But when ETH is moved across different chains on cross-chain bridges, the security of ETH now depends not only on Ethereum, but also on verifying the security of the destination chain and any other cross-chain solutions. -chains used to transfer, wrap and lock. the asset.
Buterin says it well in his tweet:
“Now imagine what happens if you move 100 ETH across a bridge on Solana to get 100 Solana-WETH, then Ethereum is 51% attacked. The attacker deposited a bunch of his own ETH into Solana-WETH and then reversed that transaction on the Ethereum side as soon as the Solana side confirmed it. The Solana-WETH contract is no longer fully collateralized, and perhaps your 100 Solana-WETH is only worth 60 ETH. Even though there is a perfect ZK-SNARK based deck that fully validates the consensus, it is still vulnerable to being stolen through 51% of attacks like this.
The distribution of assets across different blockchain security networks also means that the chains become more interdependent on each other, since the same assets are collateralized and used for different purposes. This increased risk of contagion could lead to a domino effect that ripples through different blockchain ecosystems if one were to come under attack, as opposed to if the asset remained in a blockchain:
“The problem gets worse when you go over two strings. If there are 100 chains, then there will be dapps with many interdependencies between those chains, and 51% attacking even just one chain would create systemic contagion that would threaten the economy of that entire ecosystem.
Additional Security Risks with Inter-Chain Bridges
Buterin highlights a key security issue with cross-chain bridges, but its risks don’t end there. Today, the vast majority of cross-chain bridges typically facilitate asset transfers through centralized federations and external validators.
These solutions bypass the arduous and more expensive process of decentralized chain validation, making transactions cheaper and faster. Popular examples include BitGo’s Wrapped Bitcoin (WBTC), Axie Infinity’s Ronin Bridge, Terra’s Shuttle Bridge, and more.
However, it also means that transactions move away from a form of trustless verification, increasing reliance on the operator of the cross-chain bridge, rather than the decentralized security of the underlying blockchain network.
In short, the main risks of cross-chain solutions can be summarized as being based on two points. First, cross-chain solutions increase the number of attack vectors for crypto assets, heightening the risk of cross-chain contagion. Second, transferred assets are routed through a variety of external validator networks that may no longer remain decentralized and trustless, increasing the risk to those same attack vectors.
Users are going to lose *so much* money in cross-chain bridges over the next year. pic.twitter.com/d0nntkpde7
— Dimitri Berenzon (@dberenzon) August 27, 2021
The Multi-Channel Future
Inter-chain bridges remain popular among users for the simple reason that they offer higher speed and lower costs. It’s a temporary band-aid to a larger problem. But as with all dressings, they must come off.
Like Buterin, Kadan Stadelmann, CTO of Komodo, believes that this security risk will gradually gain momentum and accelerate crypto’s journey into the multi-chain future:
“In the future, we will have both multi-chain ecosystem networks like Polkadot and Cosmos where chains rely on a shared security mechanism as well as cross-chain bridges like AtomicDEX that connect blockchain ecosystems that would otherwise be siled. . This will likely mean that DEXs and transition solutions will be adopted in droves. »
Multi-chain ecosystems (sometimes called layer-0 chains) such as Cosmos and Polkadot are designed to avoid cross-chain bridge security issues. The Polkadot blockchain allows Dapp developers to set up their own custom blockchains (called “parachains”) on top of its foundation. All parachains are interconnected through Polkadot’s main relay chain hub, which serves to coordinate the security and transfer of assets across all of its parachains.
The concept is similar for Cosmos, which consists of an ecosystem of several independent Cosmos chains (called zones) that can send tokens and data to each other. Unlike Polkadot however, there are several central hubs that zones can connect to in order to reach other zones. Terra, THORChain and Crypto.com’s Cronos chain are some of the most popular names that have settled on Cosmos.
Both Polkadot and Cosmos strive to ensure asset interoperability while ensuring the trustless transfer of assets that does not require users to trust intermediary entities like cross-chain solutions.
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