ViaBTC Capital | Can Interoperability Protocols Change the Cross-chain Market?
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As it evolves over the years, the blockchain space has become a multi-chain market, with hundreds of thriving public chains, covering Ethereum, Ethereum 2.0, Solana, Terra, Cosmos, Avalanche, and many more. As they compete with one another in terms of ecosystem development, these public chains strive to attract more developers to their ecosystem. Users and developers demand mutual collaboration between different chains that enable seamless asset transfers. Meanwhile, DApps also hope to get deployed on more public chains to capture user traffic and asset liquidity. This huge demand for asset transfer and app development has triggered the appearance of dozens of cross-chain bridges and interoperability protocols.
However, as each public chain has its own unique underlying technical framework, bridging the public chain islands is an extremely expensive, complex, and insecure process.
It was recently reported that Ronin, Axie Infinity’s exclusive side chain, was hacked, and USD 624 million of crypto assets (including 173,600 ETH and 25.5 million USDC) were stolen, which is the most disastrous security breach among cross-chain bridges ever. The hacking incident targeted private key management. As a cross-chain bridge involves the interaction of assets & data on two different public chains, its complex design has created a loophole in terms of contract permission, making it the target of hacking.
In light of such vulnerabilities, we can tell that the root cause of attacks that target cross-chain bridges is their sheer reliance on multisignature (among centralized members) or validators to protect asset transfers. Although this
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