What is a cross-chain bridge? Vulnerabilities are hackers’ favourite target
11:44, 11 October 2022
Cross-chain bridges are in the spotlight once again after hackers attacked Binance (BNB) and its BNB Smart Chain (BSC), stealing some $110m worth of cryptocurrencies on 6 October.
Billions of dollars worth of cryptocurrencies have already been lost to cross-chain bridge exploits this year and counting.
Blockchain research firm Chainalysis has calculated that a whopping $2bn in cryptocurrency has been stolen via cross-bridge exploits so far as of August 2022.
But what are cross-chain bridges and why exactly are they hackers’ darlings?
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Some of the most high-profile cross-chain bridge exploits have included the $320m Wormhole bridge hack in February, the $190m Nomad bridge attack in August and now, of course, $110m BNB Smart Chain attack.
A cross-chain bridge is a protocol used for transferring digital assets from one blockchain to another without the need to use a decentralised exchange. But why have they proven to be such a popular target for bad actors?
The answer lies in centralisation, according to Chainalysis. It said: “Bridges are an attractive target because they often feature a central storage point of funds that back the ‘bridged’ assets on the receiving blockchain.
Moreover, in the quickly-evolving blockchain space, cross-chain bridges are still a work in progress.
“Effective bridge design is still an unresolved technical challenge, with many new models being developed and tested. These varying designs present novel attack vectors that may be exploited by bad actors as best practices are refined over time,” added Chainalysis.
The BSC attack was quickly managed, with the team behind the Binance’s BNB Chain and volunteers from the crypto community suppressing the ongoing attack in a matter of hours.
Hackers targetted some two million BNB – valued at the time by some as being worth around $570m – but thanks to the counteraction by Binance and the community, they managed to steal only some $110m by transferring $57m to Fantom (FTM), $53m to Ethereum (ETH) and $400,000 to Polygon (MATIC).
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