A recent discussion on the Uniswap DAO forums highlighted ongoing security weaknesses in blockchain bridges, despite efforts to improve protocols such as Celer, LayerZero, and Wormhole, as per the February 26th report.
The need for secure bridges is urgent, with over $10 billion in crypto assets locked on bridges as of February 15, 2023, according to DefiLlama.
Blockchain bridges enable different networks to share data, including cryptocurrency. However, each network operates independently, and bridges lock coins on one network and mint copies on another to facilitate cross-chain transfers.
The issue arises when a malevolent individual has the ability to create new coins on the receiving chain or retrieve coins from the sending chain without destroying their duplicates. This leads to the emergence of additional coins that lack any backing. The Ronin and Horizon hacks of 2022 were examples of this.
Since these hacks, some bridge developers have recognized the need for better security than a basic multi-sig wallet.
Several firms have started to focus on developing bridge protocols that can be tailored or adopted by other developers to meet their unique requirements. These protocols purport to offer enhanced security compared to relying solely on a multi-signature wallet for managing withdrawals.
Uniswap DAO Considers Multibridge Solution
The Uniswap DAO had to decide which protocol to use for cross-chain governance when deploying Uniswap v3 to the BNB Chain.
The discussion revealed that no single bridge solution was secure enough for Uniswap’s purposes, leading some participants to conclude that only a multibridge solution could secure crypto assets in the cross-chain environment of crypto today.
The four protocols considered were LayerZero, Celer, Wormhole, and multibridge. LayerZero deploys a dual-server mechanism that verifies the locking of coins on the source chain prior to authorizing their creation on the target chain.
Celer uses a system called “State Guardian Networks” to validate transactions across chains. Wormhole uses a unique smart contract to track asset movements between chains, and multibridge aims to provide maximum security by allowing users to switch between bridges.
The ongoing debate underscores the importance of developing secure blockchain bridges to facilitate cross-chain transfers and prevent hacks. The growing number of crypto assets locked on bridges highlights the urgent need for security protocols to protect these assets.
While progress is being made, the industry must continue to improve and innovate in this area to ensure the safety of crypto assets and the overall growth of the crypto ecosystem.