New challenges brought by cross-chain applications to blockchain security

Security accidents have always been the focus and focus of the industry in the blockchain application field. Each occurrence of a safety incident is not only a warning to the project party, but also a challenge to the industry.

Recently, the industry is facing new challenges again: a series of security incidents frequently occur in the cross-chain application field, which shocked the industry in an all-round way.

The cross-chain application we are talking about here is a decentralized application based on the blockchain. Cross-chain applications are an emerging field that has emerged in response to the vigorous development of the Ethereum ecosystem.

In 2020, the outbreak of the Ethereum DeFi ecosystem caused congestion in Ethereum transactions and caused the spillover of the Ethereum ecosystem. The emerging blockchain public chain ecosystem compatible with the Ethereum virtual machine represented by Binance BSC, Huobi HECO, Polygon, etc. began to explode. In these blockchains, a complete DeFi ecosystem has also been developed, including applications such as decentralized exchanges, decentralized lending, machine gun pools, and stable coins.

With the outbreak of these blockchain DeFi ecosystems, cross-chain asset transfer, exchange, and mining activities between them and Ethereum have stimulated huge market demand. The emergence of this demand has driven the birth of a large number of cross-chain applications.

The so-called cross-chain application refers to the process of related transactions between two blockchains. In layman’s terms, when a transaction is made in blockchain A, the transaction will be mapped to blockchain B, which will trigger a series of follow-up activities in blockchain B.

These activities can be simple “transfer” of assets in Blockchain A to Blockchain B, or exchange of assets in Blockchain A for assets in Blockchain B…

Before the emergence of decentralized cross-chain applications, in fact, we already had the “cross-chain” applications that everyone is familiar with—centralized exchanges.

When we want to change the ERC-20 token HUSD in Ethereum to HUSD in HECO, we will deposit the HUSD in Ethereum to our Ethereum address in Huobi, and then withdraw the deposited HUSD. To our wallet address in HECO. In this process, we completed a cross-chain transaction that transferred HUSD from Ethereum to HECO through Huobi.

However, through decentralized cross-chain applications, we no longer need to log in to a centralized exchange, no longer need to perform tedious verification of withdrawals, and no longer be restricted by the amount of withdrawals, only need to log in to our Crypto currency wallet , Perform various operations in the wallet. The direct benefit it brings is to improve the efficiency of asset cross-chain, and the intangible advantages it brings are unmatched by traditional centralized exchanges: on the one hand, it greatly protects the user’s transaction privacy, and on the other hand, it gives users unparalleled Freedom of transaction.

The birth of cross-chain applications has fully promoted the freedom, depth and breadth of transactions to a higher dimension.

Because the industry has seen the advantages of decentralized cross-chain applications and its potential huge market space, cross-chain projects in the Ethereum ecosystem have sprung up this year.

However, “there is no free lunch in the world.” The birth and application of any emerging technology is not smooth sailing, not to mention the unsupervised, privacy, and free virtual world of blockchain.

The emergence of cross-chain applications in the Ethereum ecosystem has not been long, and there is still a lot of room for improvement in technology. It is only in the emerging stage, and there is still a great deal in terms of cross-chain speed, transaction performance, and transaction depth. Room for improvement. However, the biggest challenge facing the industry at the moment does not seem to be the above issues, but the imminent security issues that need to be resolved.

On June 29th, THORChain was maliciously attacked.

On July 3, the Chainswap contract of the cross-chain project was attacked. Some user tokens were actively taken out of the wallet interacting with ChainSwap. The total loss was approximately US$800,000. The cross-chain bridge was suspended.

On July 11, the cross-chain project Chainswap issued a tweet stating that it was attacked by hackers again. More than 20 project tokens that deployed smart contracts on the cross-chain bridge were stolen by hackers, with a total loss of US$4 million.

On July 12, the new V3 cross-chain liquidity pool launched by the cross-chain project Anyswap was also attacked by hackers, with a total loss of more than 7.87 million U.S. dollars.

From June 29 to now, in less than a month, so many safety accidents have occurred, which must arouse the attention and vigilance of all project parties.

We believe that cross-chain applications are only the beginning now, and attacks on cross-chain applications are now only the beginning. To cope with this brand new challenge, the project party must pay close attention to the audit of the project; as a practitioner, the security of the smart track has been fully prepared. Whether in terms of technical reserves or the alarm mechanism for predicting accidents, we are ready to meet this Brand new challenges, face this brand new battle.

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