As more and more blockchain protocols are launched, each with their own efficiencies, benefits, and areas of focus, investors and users are showing increased interest in moving assets and liquidity between them. The implementation of blockchain bridges, also known as token bridges, is necessary to ensure interoperability and enable the exchange and flow of digital assets, providing more liquidity between blockchains.
However, due to the desire to solve the problem of providing liquidity between chains, the security technology behind many blockchain bridges was initially relatively weak. Many bridges have a single trusted operator that can intercept or interfere with the transfer of the token.
Truly insecure bridges, which do not require users to trust a centralized or federated group of operators, can solve critical security concerns for bridges and their users. Solutions for untrusted bridges are critical to the long-term viability of bridges and blockchains themselves.
The main problem with low-security blockchain bridges is that they compromise the benefits of using a transparent decentralized system, which is what makes blockchain so open, efficient, transparent, and special in the first place. The attack on the Wormhole Bridge in February and the robbery of the Ronin Bridge in March compromised assets totaling $1 billion, illustrating what can go wrong if bridges are not designed securely.
Typically, bridges work by locking tokens on one blockchain and creating new equivalent tokens on another, ensuring that the tokens do not leave their respective blockchains during a transaction. Tokens are usually deposited in a bridge smart contract on the first blockchain where they are locked and will be unlocked when the transaction is reversed. Pools of locked tokens are bait for any hacker, and if compromised, the value of any unsecured wrapped tokens in the destination chain is called into question.
While this issue was raised in Algorand‘The latest Decipher conference in November 2021, the extremeness of the subsequent wormhole and ronin bridge attacks, and the fact that the value of assets held on blockchain bridges has risen to over $32 billion since early 2021 highlights the need for swift action. be accepted for implementation more secure bridge solution for the blockchain industry.
Providing a Solution
Untrusted bridge solutions are the most secure way to design and build such bridges because they do not require the involved parties to know or trust each other or a third party to keep the system secure.
For example, Applied Blockchain and Algorand are collaborating to develop an untrusted cross-chain bridge that will natively leverage Intel’s security features.‘Hardware Security Enclave (SGX) and will later use a new cryptographic feature called Proofs of State when it becomes available in Algorand. Proofs of State are an immutable series of proofs that verify the status of assets stored on its blockchain. This allows smart contracts on the target chain to process transactions from the Algorand chain.
Untrusted internet technology aims to eliminate the need for intermediaries or third parties to connect two blockchain networks, thereby improving interoperability and upholding the principle of blockchain technology.‘with decentralization.
Proof of state will help connect Algorand to the wider world of blockchains, allowing users to perform cross-chain transactions efficiently, cost-effectively, and securely. Therefore, they will also provide a blueprint for other internetworking solutions seeking to close security loopholes in more centralized systems.
Next-generation security measures such as state checks being developed at Algorand (ALGO) will be critical to the long-term viability of blockchain bridge projects. They will solve a pressing security issue and therefore encourage both users and investors to use these solutions to transfer their assets across chains.
Credit : cryptoslate.com