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Ethereum: Vitalik Buterin’s Solutions for L2 Ecosystem

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In a recent discourse on the challenges plaguing Ethereum’s Proof of Stake [POS] system, co-founder Vitalik Buterin highlighted the critical issues surrounding staking centralization and transaction processing efficiency faced by Ethereum’s Layer 2 solutions1. Buterin’s insights shed light on the hurdles that Ethereum’s L2 ecosystem must overcome, emphasizing the pressing need for improved interoperability between Ethereum’s Layer 1 and Layer 2 solutions.

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Image Credit: Wu Blockchain

One of the primary concerns highlighted by Buterin revolves around cross-layer interactions. Ethereum’s increasing adoption of Layer 2 solutions necessitates a seamless method for users to manage assets across multiple L1s and L2s without being burdened by an excessive number of transactions. To address this, Buterin proposed a novel solution: the implementation of an innovative architecture called asset/keystore separation.

Under this proposed model, users would maintain a keystore contract that houses their verification key and the rules for its modification. Wallet contracts on both L1 and various L2s would read cross-chain to fetch the verification key, ensuring secure and efficient transactions. The Ethereum founder outlined two potential implementations of this system: a “light version,” where wallets store the verification key locally and update it with cross-chain proofs, and a “heavy version,” requiring cross-chain proof for each transaction, thus reducing keystore update costs but increasing per-transaction expenses.

Crucially, Buterin identified five types of proof schemes, including Merkle proofs and Verkle proofs, each offering unique pros and cons. However, he stressed the need for highly optimized cross-chain proofs to facilitate smoother transactions and reduce overall costs.

Ethereum: Enhancing Cross-Chain Interactions

Looking toward the future, Buterin emphasized the significance of aggregating proofs through bundling operations submitted by users, which could drastically reduce expenses. Additionally, Layer 2 solutions must minimize latency when reading the Layer 1 state. To achieve this, wallets can be deployed on systems with lower ETH connections, such as Layer 3s or separate chains. However, the Keystore should be maintained either on Layer 1 or on high-security zero-knowledge rollup Layer 2 to ensure robust security measures.

According to Buterin, Ethereum is inching closer to enhancing cross-chain interactions, implementing asset/keystore separation, and placing a heightened focus on privacy. These developments mark significant strides in Ethereum’s ongoing journey toward creating a more efficient, secure, and decentralized blockchain ecosystem.

Cardano’s First Cross-Chain Bridge With BSC Launched

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Cardano-based P2P Game Cornucopias rolled out the first-ever bridge connecting the BSC blockchain, thanks to the partnership between research and development firm IOG and ChainPort, a permissionless crypto bridge.

This collaboration has enabled users to seamlessly port their COPI tokens from BSC to Cardano. In order to be able to conduct the transfer, they are required to have at least 5k COPI coins, the announcement read.

Cornucopias is one of the biggest play-to-earn projects on the Cardano network where players can play this metaverse to earn money and acquire real estate, and other NFT-based assets.

The platform’s community is also one of the largest in the Cardano ecosystem but this is hardly a surprise because it is a community-driven blockchain gaming project.

That said, according to a survey by DappRadar, Cardano has risen to be the third-largest nonfungible token [NFT] protocol by trading volume.

Cardano’s NFT Volume Tapped Close To $200M

In the 30-day period that ended on September 30, the network’s total NFT volume hit $191 million, trailing only Solana [SOL] 3.3% and Ethereum [ETH] 1.8%.

Per data from The Block, in the same time period, Ethereum, the network that powers the most widely used NFT protocol [ERC-721], made over $338 million, whereas Solana contributed $116 million in NFT volume.

The trading volume on the largest NFT marketplace for ADA +0.6% this quarter surged by 40%, hitting $11.2 million on the platform alone. However, none of the top 10 marketplaces listed by DappRadar support Cardano NFTs, which makes them unavailable to anybody outside the network of that blockchain.

The network’s Vasil update, which went live on Sept. 22 after a series of delays and doubled the network’s operating capacity while decreasing transaction time, is mostly responsible for the spike in trading volume.

Additionally, the hard fork triggered the release of Plutus v2, the network’s smart contract language, which facilitated chain development for developers.

In accordance with a blog article by DappRadar, Cardano remains the favored option for large projects due to its “scalability, interoperability, and sustainability,” yet its $66 million Total Value locked [TVL] is meager compared to Ethereum’s $31.4 billion and Solana’s $955.5 million.

Cross-Chain Bridge Nomad Loses $200M In One Of The Most “Chaotic” Hack

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Nomad, a cross-chain token bridge was exploited for nearly $200 million, draining most of the assets. Acknowledging the same, the Nomad team released a statement that it is working to identify the accounts involved and to trace and recover the funds.

According to DefiLlama, over $190 million in crypto has been emptied from the protocol, remaining only $651.5 in the wallet.

Online sleuths pin the blame on the platform’s flawed smart contracts. One such expert who works as a researcher in crypto investment firm Paradigm detailed how a recent update on one of Nomad’s smart contracts made it an easy target for exploiters to spoof transactions.

“Attackers abused this to copy/paste transactions and quickly drained the bridge in a frenzied free-for-all”, he said. Calling the attack one of the most chaotic in the history of web3, samczsun continued,

“You didn’t need to know about Solidity or Merkle Trees or anything like that. All you had to do was find a transaction that worked, find/replace the other person’s address with yours, and then re-broadcast it.”

Echoing similar views, one of the newer clients of Nomad- Evmos, posted,

“A vulnerability in the bridge contract allowed it to accept arbitrary root hashes, allowing several entities to withdraw large amounts of assets. Currently, Nomad is paused, so users cannot withdraw their ERC20 wrapped assets from Evmos back to Ethereum.”

The platform further tweeted that it would be “brainstorming community solutions” given that it “significantly impacts initial Evmos [total value locked].”

Unlike other bridge attacks, where a single culprit is responsible for the entire exploit, the Nomad attack was an open loot.

Crypto Sleuths Termed Nomad Attack As A “Decentralized Robbery”

In what’s being called a “decentralized robbery” the vulnerability in Nomad’s coding allowed many to steal the money they didn’t own just by copying and pasting a script.

According to reports, some exploited their smart contract with public wallet addresses that are designed to be traceable. Many returned the funds back. Others claimed to be acting in good faith and sent back the funds while pledging to protect the smart contract.

Nomad allows users to send and receive tokens between different blockchains. The latest incident has cast serious doubt on the security of cross-chain bridges.

ChainSwap’s Cross-Chain Bridge Aggregator goes LIVE

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ChainSwap, a cross-chain bridge hub for smart chains has launched its own cross-chain bridge aggregator. Announcing the same in its official Twitter handle, the multi-chain platform revealed that the initial version of the Bridge Aggregator would integrate the three popular bridge solutions- Poly Bridge, Multichain, and AnySwap and would be supporting additional bridges in the near future. Revealing on its primary objective, the network aims to integrate all cross-chain bridges available on the crypto market and in turn become the ‘go-to platform for all cross-chain solution seekers’.

ChainSwap Bridge Aggregator Use Cases

A multi-chain bridge intermediary like ChainSwap allows users to transfer a token seamlessly from different networks such as Ethereum [ETH] to Binance Smart Chain [BSC] with decentralized cross-chain technology. Without an aggregator such as ChainSwap and it’s like, users often encounter a few challenges like researching which bridge supports the token on both chains and finding which among them offers the lowest slippage and transaction fee, on top of other information such as estimated bridge duration time.

This in turn is a lot time-consuming and difficult as one goes on comparing all the currently offered bridge solutions.

What does the ChainSwap market looks like?

As per on-chain data provider Dune Analytics, the combined total value locked [TVL] of Ethereum bridges is $23.66 billion at the time of writing, rising by more than 100% in a span of 60 days. In addition to that, the data also tracks 17 prominent Ethereum bridges which are growing at a staggering rate.

Apart from that, there are several cross-chain solutions that are currently available in the broader market which include Cambridge, Hop, Binance Bridge, Terra Bridge, Anyswap, Allbridge, RenBridge, Xpollinate, Polynetwork, etc. More such cross-chain projects are expected to be deployed in the future.

As for now, the first step of the integration with Poly Bridge and Multichain is just been completed and the ChainSwap’s ultimate goal is to roll out the entire product in small steps. The next process would be to provide support for other bridges such as AnySwap and Wormhole, which is currently in the development phase and is expected to go live shortly.