In a well-publicized tweet last week, Vitalik Buterin spoke out against 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 not *cross-chain*: There are fundamental limits to the security of bridges hopping across multiple “zones of sovereignty”. Retrieved from https://t.co/3g1GUvuA3A: pic.twitter.com/tEYz8vb59b
— vitalik.eth (@VitalikButerin) January 7, 2022
For Buterin, cross-chain bridges aren’t ideal because they increase security risks when transferring assets. This security trade-off occurs because the assets’ attack vectors are increased across a larger network surface as they move across an increasing number of chains and decentralized applications with different security principles.
If your ETH is contained in Ethereum, it only depends on the security validation of the Ethereum network. But when moving ETH across different chains on cross-chain bridges, the security of ETH now depends not only on Ethereum, but also on the security verification of the target chain and all other cross-chain solutions used for transferring, packaging and locking be used to increase wealth.
Buterin put it in a nutshell in his tweet:
“Now imagine what happens when you move 100 ETH to a bridge on Solana to get 100 Solana WETH and then Ethereum is 51% attacked. The attacker deposited a pile of his own ETH with Solana-WETH and then reversed that transaction on the Ethereum side once the Solana side confirmed it. The Solana WETH contract is now not fully hedged and maybe your 100 Solana WETH is now only worth 60 ETH. Even if there is a perfect ZK-SNARK based bridge that fully validates the consensus, it is still vulnerable to theft from 51% of such attacks.”
The distribution of assets across different blockchain security networks also means that chains become more interdependent as the same assets are collateralized and used for different purposes. This increased risk of contagion could lead to a domino effect that would ripple through different blockchain ecosystems if one suffered an attack, as opposed to if the asset remained on a blockchain:
“The problem gets worse when you go beyond two chains. If there are 100 chains, then you will end up with dapps with many dependencies between those chains, and 51% attacking even one chain would create a systemic contagion that threatens the economy of the entire ecosystem.”
Additional security risks with cross-chain bridges
Buterin highlights a key security issue of cross-chain bridges, but the risks don’t stop there. The vast majority of cross-chain bridges today typically facilitate asset transfers through centralized federations and external validators.
These solutions bypass the tedious and 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, this also means that transactions are moving away from a trusted form of verification, increasing the reliance on the cross-chain bridge operator rather than the decentralized security of the underlying blockchain network.
In short, the main risks of cross-chain solutions can be summarized in two points. First, cross-chain solutions increase the number of attack vectors for the crypto assets and increase the risk of contagion across chains. Second, the transferred assets are routed through a variety of external validation networks that may no longer remain decentralized and trusted, increasing risk via the same attack vectors.
Users will lose *so much* money in cross-chain bridges over the next year. pic.twitter.com/d0nntkpde7
— Dmitriy Berenzon (@dberenzon) August 27, 2021
The multi-chain future
Cross-chain bridges remain popular with users for the simple reason that they offer a premium in terms of speed and low cost. It’s a temporary band-aid for a bigger problem. But as with all patches, they must be removed.
Kadan Stadelmann, CTO of Komodo, agrees with Buterin that this security risk will gradually raise awareness 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 common security mechanism, and cross-chain bridges like AtomicDEX, connecting blockchain ecosystems that would otherwise be isolated. This will likely mean that DEXs and bridge solutions will achieve mass adoption.”
Multi-chain ecosystems (sometimes referred to as Layer 0 chains) like Cosmos and Polkadot were designed to avoid the security issues of cross-chain bridges. The Polkadot blockchain allows Dapp developers to set up their own custom blockchains (dubbed “parachains”) on top of it. All parachains are interconnected through Polkadot’s main relay chain hub, which serves to coordinate security and asset transfers across all of its parachains.
Polkadot’s Shared Security Federation model (source)
The concept is similar for Cosmos, which consists of an ecosystem of multiple independent Cosmos chains (called zones) that can send tokens and data to each other. However, unlike Polkadot, there are multiple central hubs that zones can plug into to reach other zones. Crypto.com’s Terra, THORChain, and Cronos chain are among the most popular names to take up residence on Cosmos.
Cosmos’ Hub & Spoke Model is the Internet of Blockchains (source)
Both Polkadot and Cosmos strive to achieve asset interoperability while ensuring trusted transfer of assets where users do not have to rely on intermediary entities such as cross-chain solutions.
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