Amidst the Mounting Risks to Bridge Security, A New Non-custodial Liquidity Bridge Focuses on Decentralization
May 17 2022 - 3:19AM
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In late March, Ronin bridge, an Ethereum sidechain built for the
widely popular play-to-earn (P2E) NFT game Axie Infinity to handle
surging demand from gamers, was hacked for over 173,600 Ether (ETH)
and 25.5 million USD — a combined value of over $600 million. The
company’s official report regarding the hack noted that the hackers
managed to get access to validator nodes, which resulted in the
compromise of five validator nodes, a threshold also required to
approve a transaction. Currently, the Ronin chain consists of nine
validator nodes, and the hacker managed to get access to four of
them and a third-party validator run by Axie DAO. This Axie DAO
node was the root cause of the exploit last year. The DAO gave its
access to Sky Mavis, the developers behind the game to sign off on
transactions on its behalf. Because the access was never revoked,
hackers leveraged it to their benefit by turning it into backdoor
access, leading to a multi-million dollar hack. In the aftermath of
the exploit, the Ronin bridge was closed, and all the deposits and
withdrawals were halted for investigation purposes. In response to
the hack, Axie Infinity co-founder and COO Aleksander Leonard
Larsen said at the time that they would be adding several new
validators to the Ronin Network to decentralize the network
further. The game developers also promised to increase the number
of validator nodes from nine to 21 in the future. The Inevitable
Future In the end, Sky Mavis managed to raise $150 million from
crypto exchange Binance and other investors to reimburse the
affected users. But not every project can afford to bail out its
users, and according to data from Dune Analytics, funds worth more
than $21 billion are locked on Ethereum bridges. Moreover, bridge
hacks are becoming quite common in the cryptocurrency industry.
Data from Chain Analysis suggests weakness in bridges has led to
more than $1 billion stolen in cryptocurrency over a year across
seven different incidents. While many believe bridges are the
single most significant potential point of failure in crypto,
others say that’s not true. “Bridges are an incredibly critical
piece of infrastructure at this point,” Kanav Kariya, president of
Jump Crypto, said in an interview after the $300 million hack of
Wormhole bridge. “We are strongly moving toward a multi-chain
world.” Ethereum co-founder Vitalik Buterin has warned that bridges
have “fundamental security limits,” although he is optimistic about
a “multi-chain blockchain future.” Meanwhile, popular commentator
“ChainLinkGod” has asserted that “the implementation and adoption
of cross-chain smart contracts and token bridges are inevitable,”
and “given that it’s going to happen regardless, the goal shouldn’t
be to avoid cross-chain, but have protections in place.” A
Decentralized, Non-custodial Bridge This is why DotOracle, the
first decentralized, non-custodial liquidity bridge on the Casper
Network is more secure. After all, the more decentralized a
blockchain bridge, the more secure it is. To ensure the
decentralization and security of the bridge, the DotOracle bridge
will have about 15 validator nodes which will be further increased
in phase 2 after the mainnet version becomes stable. DotOracle is a
decentralized network of independent nodes designed to be
censorship-resistant. It can continue providing its service as long
as two-thirds of the network nodes are online. The project is
primarily building a decentralized oracle and cross-chain liquidity
network (bridge) on the Casper Network, the future-proof,
proof-of-stake blockchain built off the Casper CBC specification.
Casper is designed to fast-track enterprise and developer adoption
of blockchain technology today and to meet user needs in the
future. Transferring Assets Securely DotOracle offers fast asset
transfer confirmation with a highly secure distributed consensus
protocol PBFT. Meanwhile, the non-custodial service is provided
through the Elliptic Curve (EC) Multisignature scheme, which means
users have complete control over their assets during the transfer.
Another feature of DotOracle is bonded network with slashing,
meaning any nodes must deposit an amount of DTO token to the
DotOracle smart contracts. A violation of the mechanism leads to
the burning of the token deposit, which discourages validator
misbehavior. This robust penalty slashing mechanism is implemented
to incentivize every node to follow the protocol to be rewarded in
DTOs by providing proper service to users. DTO is a governance
token with a total supply of 100 million. Validators are rewarded
in DTO for providing the service to DotOracle. Anyone can operate a
node, but to become a validator node, one must deposit a minimum of
500,000 DTO to DotOracle smart contracts. Recently, DotOracle
launched the testnet of its multi-chain bridge that aims to
transfer digital assets back and forth between different
blockchains in a fast, decentralized, secure way. This coming
quarter, the team will launch its mainnet that will allow you to
transfer assets between all the chains supported by DotOracle
Network, including Casper Network, MoonBeam Polkadot, Ethereum,
Binance Smart Chain, Polygon, Fantom, Avalanche, Tomochain.
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