Chainalysis Reports $2B Stolen from Cross-Chain Bridge Hacks in 2022

Chainalysis Reports $2B Stolen from Cross-Chain Bridge Hacks in 2022

Cross-Chain Bridges are pillars that make cryptocurrencies and the crypto ecosystem so decentralized. Cross-Chain Bridges are clever little protocols that serve as connectors (or bridges as their name implies) between blockchains. These bridges make it easier for users of one blockchain to move their assets into another.

An excellent example of a Cross-Chain Bridge is the Celer cBridge. The Celer cBridge uses the Celer state guardian network to provide interoperability across various Blockchain like Ethereum, Avalanche, and Polygon.

And yet, as useful as Cross-Chain Bridges are, they are riddled with vulnerabilities.

How Much Was Stolen This Year?

As reported by Chainalysis, in 2022 alone, an estimated $190 million was stolen from the Nomad Bridge Protocol, $600 million from the Ronin Bridge Protocol, and $97 million from the Harmony Bridge between the Harmony Blockchain and the Ethereum Blockchain.

So far, there have been five cross-chain bridge exploits, leading to $2 billion in losses. An estimated 69% of all the total web3 losses in 2022.

As mentioned earlier, the problem with these bridges is the lack of expertise required to defend against these attacks. This fact was stated even, in a released video clip on Twitter, by James Prestwich in July 2022.

In this clip, Prestwich explained how the general expertise required to build security models for cross-chain applications might take as much as a year to achieve.

Vitalik Buterin himself on Reddit has expressed pessimism about cross-chain applications due to 51% attacks- a kind of security exploit in which a person or group gains control of 51% of a Blockchain's hashing power. This exploit gives the attacker(s) certain privileges and control over certain aspects of the Blockchain.

Why Are Cross-Chain Bridges so Frequently Attacked?

Cross-Chain bridges, in the literal sense, are central storage points of funds, moving from one chain to another.

As an analogy, a good way to get water out of a locked tank would be to attack one of the less-guarded pipes.

Regardless of how the funds in a bridge are stored (whether locked in a smart contract or stored using a centralized network), bridges are and will always be targeted. This explains why 2022 alone has experienced the theft of such large amounts of money.

Coupled with bridges being relatively easy to attack, the technology required to build exploit-resistant bridges is still an unresolved technical challenge. Every once in a while, a new design for a secure bridge comes up for development and testing.

During this testing stage, attackers might use these models' differences to find a way into the system and move away with funds.

What Can Be Done to Stop These Attacks?

While no method can ever be bulletproof, an excellent way to stop these losses and reduce the frequency of these attacks would be to hire skilled developers to carry out extensive inspections of these bridge protocols and stamp out these vulnerabilities one by one.

Just a few years ago, centralized exchanges also suffered from these attacks. Today, it is hard to find cases of successful hacks on these platforms.

This is so because the centralized exchanges invested in security measures and training.
More developers and teams must be trained to prevent, identify and stop these attackers before they have a chance to do much damage.

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