Op-Ed: Trustless bridges: A much-needed answer to the cybersecurity threats of blockchain bridges

Implementing blockchain bridges, also known as token bridges, is critical for creating interoperability and allowing the exchange and flow of digital assets, providing more liquidity between blockchains.

As more blockchain protocols are created, each with its own set of efficiencies, advantages, and areas of focus, investors and consumers are more interested in moving assets and liquidity across them. Implementing blockchain bridges, also known as token bridges, is critical for creating interoperability and allowing the exchange and flow of digital assets, providing more liquidity between blockchains.

However, in the hurry to meet the urge to offer cross-chain liquidity, many blockchain bridges’ security technology was initially quite inadequate. Many bridges are managed by a single trusted operator who has the authority to intercept or intervene in token transfers.

Truly trustless bridges, which do not need users to place trust in a centralized or federated set of operators, can address the pressing issue of bridge and user security. The long-term viability of bridges and blockchains depends on trustless bridge solutions.

Taking care of the problem

 

The fundamental problem with low-security blockchain bridges is that they jeopardize the advantages of having a transparent, decentralized system, which is what makes blockchain so open, efficient, transparent, and unique in the first place.

Bridges typically function by locking tokens on one blockchain and minting fresh equal tokens on another, ensuring that tokens do not leave their respective blockchains during a transaction. Tokens are often put into a bridge smart contract on the initial blockchain, where they are locked until the transaction is reversed. Pools of locked tokens act as a honeypot for hackers, and when they are hacked, the value of any unbacked wrapped tokens on the destination chain is put into doubt.

While this concern was mentioned during Algorand’s most recent Decipher conference in November 2021, the severity of the following Wormhole and Ronin bridge assaults, as well as the fact that the value of assets held on blockchain bridges, has increased to more over $32 billion since the beginning of 2021, indicating that immediate action is required to build a more secure bridging solution for the blockchain sector.

Offering a solution

 

Trustless bridge solutions are the most secure approach to design and create these bridges because they do not require the participants to know or trust each other or a third party in order for the system to be safe.

For example, Applied Blockchain and Algorand are working together to create a trustless cross-chain bridge that will initially rely on the security properties of Intel’s hardware security enclave (SGX) and will later rely on a new cryptography feature known as state proofs when it becomes available in Algorand. State proofs are an unchangeable collection of proofs that confirm the status of the state of assets stored on its blockchain This allows smart contracts on the target chain to execute Algorand chain transactions.

Trustless cross-chain technology aims to eliminate the need for intermediaries or third parties to join two blockchain networks, boosting interoperability and respecting the decentralization concept of blockchain technology.

State proofs will enable Algorand connect to the larger blockchain world, allowing users to perform cross-chain transactions in an efficient, cost-effective, and safe manner. As a result, they will serve as a model for additional cross-chain solutions seeking to overcome security gaps in more centralized systems.

Next-generation security mechanisms, such as the state proofs being developed at Algorand (ALGO), will be vital for blockchain bridge projects’ long-term survival.

They will address an urgent security concern, encouraging both users and investors to adopt these solutions to transfer assets across chains.