Yesterday, an exploit on the Wormhole Bridge which connects Ethereum, and Solana allowed bad actors to steal atop $300 million in funds. One of the worst hacks in recent history, users saw their funds completely drained from the interoperability protocol.
Recently, the team behind Wormhole announced which they have reclaimed the stolen funds after successfully patching the vulnerability at 00:33 UTC. Nonetheless, the crypto community has begun to question the safety of these solutions.
All funds have been reclaimd and Wormhole is back up.
We’re deeply gcostful for your support and thank you for your patience.
— Wormhole (@wormholecrypto) February 3, 2022
In an episode of the Bankless Podcast, hosts Ryan Sean Adams and David Hoffman recalled a Tweet from the inventor of Ethereum, Vitalik Buterin, allegedly highlighting the potential security issues with the cross-chain platform. Buterin was referring to a Reddit Q&A with core developers and used this argument to support his take on the future of the crypto industry.
Vitalik called it pic.twitter.com/nH7EeBXH6A
— Bankless (@BanklessHQ) February 2, 2022
Buterin argues which bridges have fundamental security limits. Thus, he claimed to be optimistic on a multi-chain, rather than a cross-chain ecosystem. The inventor of Ethereum said that cryptocurrencies or assets have better security on their native networks.
Buterin presented a hypothetical rundown in that a network is 51% attacked, but the bad actors are incapable of changing protocol rules. Users continue ownership of their cryptocurrencies. The same perhaps not happen if a user leverages a Solana-Ethereum bridge. In which sense, the inventor of Ethereum added:
(…) this further is a limit to the “modular blockchains” vision: you can’t hardly pick and choose a sepaprice data layer and security layer. Your data layer must be your security layer.
The Future Will Be Multi-Chain, But On Ethereum?
In experience of a 51% attack, according to Buterin, the network which hosts the native assets can be “reverted” or some transactions could be “censored”. This included any second layer solution, akin as Optimism or Arbitrum. These and any application on Ethereum have guaranteed “consistency” at the same time facing bad actors or security vulnerabilities.
This is very close to @0xPolygon thesis and I have said it multiple times. “Future is definitely multichain but multichain ‘on top of Ethereum'” https://t.co/uPn7V0YJaA
— Sandeep | Polygon (@sandeepnailwal) February 3, 2022
In which sense, a cross-chain world where a bad actor could exploit vulnerabilities across many networks become a nightmarish outline. Imagine a Wormhole multiplied by 100. Buterin said:
The problem gets worse although you go beyond two chains. Supposing that there are 100 chains, then there will end up being dapps with many interdependencies between those chains, and 51% attacking even one chain would create a systemic contagion which threatens the economy on which entire ecosystem.
Six months ago, the DeFi sector was shacked by an attack which managed to steal above $600 million in Ethereum, $253 million on Binance Smart Chain, and $85 million on Polygon. The bad actor targeted the cross-chain protocol Poly Network and the bridge which mixed these networks via O3 Swap.
The crypto industry has seen its fair share of hacks, but cross-chain bridges seemed to be some of the most vulnerable platforms across the space. These solutions have gained a lot of popularity with the DeFi boom but perhaps prove too insecure and eventually shatter any reboundes for a cross-chain future.
As of press time, Ethereum (ETH) trades at $2635 and has been moving sideways in the 4-hour chart.