Bridge attacks will still pose a significant challenge for DeFi in 2023 — Security experts

Bridge attacks will still pose a significant challenge for DeFi in 2023 — Security experts

Security has been a critical challenge for decentralized finance (DeFi) and its evolution. Between 2020 and 2022, hackers stole more than $2.5 billion through vulnerabilities in cross-chain bridges, Token Terminal data shows. This is a significant amount compared to other security breaches. The problems with bridges have a root cause. They all have an “inherent vulnerability,” Theo Gauthier, Toposware’s founder and CEO.

According to Gauthier, no matter how secure a bridge is, “it depends entirely on the security of the chains it connects”, meaning that any gap or fault within either of the two bridged chains causes the bridge in general to be vulnerable. In short, bridges are used to connect different blockchains and aim to address the lack of standards between protocols. Blockchain interoperability is key to enhancing the end-user experience and encouraging broader adoption of Crypto.

Interoperability and security solutions in the crypto industry are gaining ground despite the bear market. One of the most important technologies available is zero-knowledge proofs (ZKP), which allow you to check and prove that data is correct without revealing any further information. Unlike typical interop solutions, networks must disclose their states. It is also possible via ZKP to create an Ethereum Virtual Machine (EVM) powered by ZK, noted Mudit Gupta, director of information security at Polygon. This would allow developers to create scalable and fully private Ethereum-compatible intelligent contracts. Gupta also added, “We believe in the old cryptographic adage ‘Don’t trust, verify’. This is unique.” And feasible with solutions driven by ZK. The zkEVM has proven to maintain privacy, decentralization, speed and scalability. With no need to sacrifice anything that made the crypto space what it is and makes it better. For bridges, real-time checking and monitoring standards would be the solution,” noted Gustavo González, solution developer at Open Zeppelin.

Bridge’s smart contracts “should be audited, ideally by multiple third parties, before being released into the wild”. It’s happening, Gonzalez said.

Combining security software solutions with blockchain protocols could make the entire space safer for users and investors. A Bitcoin (BTC) maximalist would say, “Just use Bitcoin, and you won’t have these problems at all”. While smart contracts for Bitcoin are a work in progress, DeFi players are tasked with building trust in their respective ecosystems amid ongoing security concerns.

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