A much-needed solution to the security risks of blockchain bridges

As more and more blockchain protocols are launched, each with its own efficiency, benefits, and focus areas, there is growing interest from investors and users in moving assets and liquidity between them. I am. The implementation of blockchain bridges (also known as token bridges) is essential for interoperability, enabling the exchange and flow of digital assets, and increasing liquidity between blockchains.

However, in a hurry to deal with the pressure to achieve cross-chain liquidity, the security technology behind many blockchain bridges was initially relatively weak. Many bridges have a single trusted operator who has the authority to intercept or intervene in token transfers.

A truly untrusted bridge can solve urgent security issues with the bridge and its users, as users do not have to rely on a centralized or integrated group of operators. Unreliable bridge solutions are important for the long-term vitality of the bridge and the blockchain itself.

Dealing with problems

The main problem with low security blockchain bridges is that the benefits of using a transparent distributed system are diminished. This makes the blockchain very open, efficient, transparent and special in the first place. The attack on the Wormhole Bridge in February and the robbery on the Ronin Bridge in March endangered a total of $ 1 billion in assets, showing what would go wrong if the bridge was not designed safely.

In general, a bridge works by locking a token on one blockchain and creating a new equivalent token on another blockchain. This will prevent the token from leaving each blockchain during a transaction. Tokens are typically deposited in the first blockchain bridge smart contract, where they are locked and unlocked when the transaction is canceled. The pool of locked tokens represents a hacker’s honeypot, and if compromised, the value of unbacked up wrapped tokens on the destination chain becomes an issue.

This issue was raised in Algorand‘At the latest deciphering conference in November 2021, the culmination of subsequent wormhole and ronin bridge attacks was that the value of assets held in blockchain bridges rose to more than $ 32 billion from the beginning of 2021. Along with the fact, it emphasizes the need for swift action.Taken to implement Safer bridge solution For the blockchain industry.

Providing a solution

Untrusted bridge solutions are the safest way to design and build these bridges, as the participants involved do not have to know and trust each other or third parties to secure the system.

For example, Applied Blockchain and Algorand are working together to develop an untrusted cross-chain bridge that first leverages Intel’s security properties.‘■ It is a hardware security enclave (SGX) and will use a new encryption feature called state certification when it is later available in Algorand. A state proof is a set of immutable proofs that verify the status of an asset held on the blockchain. This allows smart contracts on the target chain to handle transactions from the Algorand chain.

Unreliable cross-chain technology seeks to eliminate the need for intermediaries and third parties to connect two blockchain networks, thereby improving interoperability and preserving the principles of blockchain technology.‘■ Decentralization.

State certification helps connect Algorand to the wider blockchain world and enables users to complete cross-chain transactions efficiently, cost-effectively and securely. Therefore, it also provides a blueprint for other cross-chain solutions aimed at closing security loopholes in more centralized systems.

Next-generation security measures, such as National Certification (ALGO) under development in Algorand, are critical to the long-term feasibility of the blockchain bridge project. They solve urgent security issues and encourage both users and investors to use these solutions to transfer assets between chains.