Vitalik Buterin explains how cross-chain applications are a failure
In a Reddit post made on January 7, Etereum’s Co-Founder, Vitalik Buterin, has outlined critical security concerns around cross-chain bridges in the blockchain ecosystem.
As explained by Buterin, storing native assets directly-chain (for example, Ethereum on Ethereum, or, Solana on Solana, etc.) would be providing a certain degree of immunity against 51 per cent attacks. As told by him, even if hackers have managed censoring or reversing the transactions on the chain, they would not be able to take away anyone’s cryptocurrencies.
The same rule would also apply to the Ethereum application. Suppose, a scenario would be when hackers launch a 51 per cent attack (if they manage to control 51 per cent of all circulating ETH supply) while an investor is swapping 100 ETH for 320,000 DAI stablecoin, the end state would then remain invariant, i.e., the investor would be able to always get either 100 ETH or 320,000 DAI.
Buterin, however, continued, that the same level of security would not apply to cross-chain bridges. In the example he has raised, if an attacker had deposited their own ETH onto a Solana (SOL) bridge for obtaining Solana-wrapped Ether (WETH) and had then reverted that transaction on the Ethereum side very sooner than Solana side confirming it. It would incur then devastating losses on other users who have their tokens locked in the SOL-WETH contract, as the wrapped tokens would no longer be backed by the original on a 1:1 ratio.
Buterin has further outlined how the security exploits have the potential of scaling negatively as more bridges would be added into a cross-chain network. In a theoretical network that comprises 100 chains, the high level of interdependency and overlapping derivatives would then mean that a 51 per cent attack on one chain occurs, especially a small-cap one, which would then cause a system-wide contagion.
According to Crypto 51, it would cost more than $1.78 million an hour to hackers for mounting a 51 per cent attack vector against the Ethereum network. However, the cost would subsequently drop to as little as $13,846 per hour for blockchains like Bitcoin Cash.
