In a report released this week, blockchain analytics firm Chainalysis said vulnerabilities in cross-chain bridge protocols emerged as the top security risk.
The company estimates that $ 2 billion in cryptocurrency was stolen from bridges in 13 different exploits this year. "Cross-chain bridge attacks represent 69% of the total funds stolen so far this year," he added.
A bridge is software that usually consists of smart contracts that allow tokens to be transferred from one network, such as Ethereum (ETH), to another, such as Avalanche (AVAX). Each blockchain ecosystem has its own token standard, even though Ethereum's ERC-20 has emerged as an industry standard.
A bridge too far
The report follows this week's Nomad bridge hack, which resulted in the loss of the entire protocol collateral, amounting to $ 190 million.
The report adds that as value flows over these bridges, they become more attractive to hackers. The report also claims that North Korea-linked hacking groups have been responsible for half of the losses incurred this year, targeting decentralized finance (DeFi) bridges and protocols.
Bridges are lucrative targets for cybercriminals because they often store the funds that support bridged tokens on the destination chain. Funds could be held in a smart contract or centralized custodian, but they become a central storage point which is the goal.
Furthermore, bridges are mainly experimental and the technology has not had time to mature, which means that vulnerabilities and new attack vectors can be discovered.
The biggest bridge breach was Ronin's, which was exploited for $ 615 million in March. Ronin allows users to transfer assets from the Axie Infinity (AXS) metaverse between various blockchains. In February, the Solana (SOL) Wormhole Bridge was exploited for $ 325 million.
To protect themselves, cryptocurrency platforms have been invited to undergo rigorous review processes. However, audited smart contracts can also be leveraged. As in the case of the Web3 music streaming platform Audius, which lost $ 6 million in a hack in July.
While this is not a bridging attack, the Solana ecosystem suffered another setback this week when as many as 8.000 wallets were exploited for over $ 8 million.
The cryptocurrency market does not allow itself to be discouraged
In previous years, multimillion-dollar hacks and exploits caused cryptocurrency markets to collapse. This week, however, they don't seem to be discouraged.
Total market cap gained 2% on the day, reaching $ 1,12 trillion. However, the markets remain range bound, with resistance too strong to overcome.
Bitcoin (quotation BTC) was up 1,5% to $ 23.146, while Ethereum was up 2,7% this morning to $ 1.654 at the time of writing.
