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Security experts believe bridge attacks will still be a significant concern for DeFi in 2023

According to statistics from Token Terminal, hackers stole more than $2.5 billion between 2020 and 2022 through flaws in cross-chain bridges.

Photo by Nahel Abdul Hadi / Unsplash

Hackers have stolen more than $2.5 billion in the last two years via cross-chain bridge vulnerabilities.

The present situation

The development of decentralized finance (DeFi) has faced significant security challenges. According to statistics from Token Terminal (1), hackers stole more than $2.5 billion between 2020 and 2022 through flaws in cross-chain bridges. Comparatively speaking, this volume of security breaches is significant. Bridge problems have a fundamental cause. According to Theo Gauthier, founder and CEO of Toposware, each of them has an inherent vulnerability. No matter how secure a bridge is, according to Gauthier, it is completely dependent on the security of the chains it links, meaning any flaw or fault inside one might compromise the security of the others. The two bridged chains expose the total bridge.

In a nutshell, bridges try to alleviate the absence of standards amongst protocols by establishing connections between various blockchains. It is thought that achieving interoperability between blockchains will significantly improve user experience and encourage wider use of cryptocurrencies. Despite the bear market, solutions for interoperability and security in the cryptocurrency sector are gaining ground. Zero-knowledge proofs (ZKPs), one of the most important technologies available, allow data to be validated and certified as true without disclosing further information, in contrast to usual interoperability solutions that demand networks to expose their states.

The measures to be implemented

KPIs allow for the creation of an Ethereum Virtual Machine (EVM) that is powered by ZK, according to Mudit Gupta, a chief information security officer at Polygon. This would enable designers to introduce scalable and entirely private smart contracts compatible with Ethereum. Gupta further stated, adhering to the cryptography adage, There is no doubt that this is feasible with ZK-powered systems.

The zkEVM has demonstrated the capacity to retain privacy, decentralization, speed, and scalability. With this, nothing that has made the crypto space what it is has to be sacrificed; on the contrary, it gets better.‌‌ According to Gustavo Gonzalez, a solutions developer at Open Zeppelin (2), real-time monitoring and auditing standards would be the answer for bridges. Before being made available "into the wild," Bridges' smart contracts "should be inspected, ideally by numerous third parties. Every time an update is made, a new audit should be conducted, and all findings should be openly disclosed to the public.

Gonzalez said that enhanced security monitoring might also be used to indicate potentially suspect behavior patterns, uncovering an attack before it occurs. Users and investors may feel more comfortable using blockchain technologies if security software is combined with them. While Bitcoin smart contracts are being developed, DeFi participants will be challenged with fostering confidence within their ecosystems in the face of continued security issues.