Coinbase： Basic knowledge of cross chain bridge 、 Facts and statistics

Introduce

Bridge is a relatively new concept , stay 2021 It became popular in . The bridge allows cryptocurrency holders to move between different blockchains “ Move ”( or “ The bridge ”) Their assets . This allows them to jump from one chain to another and contact other networks .

We found out from 2021 year 4 Month begins , Ethereum's cross chain activities have increased dramatically . The daily deposit activity of Ethereum bridge is 2021 It peaked in the summer of , Ethereum bridging has a record high of more than 6 Ten thousand transactions took place in 2021 year 9 month 12 Japan .

This article aims to explain what a bridge is , Why are bridges so popular , And why bad actors bridge funds across networks .

What is a bridge ?

A bridge is an application , It uses cross chain communication technology to support transactions between two or more networks , These networks can be the third 1 layer 、 The first 2 layer , Even off chain services . In short , The bridge allows cryptocurrency holders to transfer their assets from one network to another . for example , In Ethereum USDC Holders may want to use the bridge application to transfer their USDC From Ethereum to Avalanche.

However , Bridges do not move assets between chains , It links assets on one network to assets on another network ( Packaged version ). Cross chain transactions are through “ lock ”、“ to mint ” and “ The destruction ” To achieve .

hypothesis Alice I want to pass a call Bridge Your bridge application will 100 individual ETH Bridge from Ethereum to another one called Network Other On the Internet ( A blockchain network )：

• Alice In Ethereum Bridge Deposit... In the contract 100 ETH;
• The bridge contract on Ethereum locks in assets , And notify Network Other Another bridge contract on ; The asset can only be accessed when the user makes a withdrawal request ：
• Network Other Bridge contract generation on ( establish )100 Tokens , For locked ETH( That is, packed ETH);
• Bridge The contract will be newly cast ETH Transferred to the Network Other On Alice The address of ：

Alice Now in Network Other Hold on to 100 A packed ETH. later , She received a message from someone else 10 A packed ETH. Now? , She is in Network Other The address balance on the is increased to 110 A packed ETH. She decided to withdraw all funds to Ethereum ：

• stay Network Other On ,Alice Send... To the bridge contract 110 A packed ETH;
• Network Other The contract on the bridge burned down ( The destruction )110 packaged ETH, And inform the bridge contract on Ethereum ;
• In Ethereum Bridge Contract verification withdrawal request ( for example ,Alice Is it true that Network Other Owned on 110 A packed ETH). If all checks pass , It will 110 individual ETH Unlock to Ethereum Alice The address of :

How and when did bridges become so popular ?

Bridge Technology in 2021 Began to take off in . Especially in 2021 year 4 Months later , We see that the cross chain traffic of Ethereum increases exponentially —— Including the number of transactions per day and the unique address stored in Ethereum bridge . We think , This upward trend may be driven by one of the following reasons ：

• The increase in the number of Bridge Applications .Wormhole Launched Ethereum -solana Bridge ,Multichain (AnySwap) Launched Ethereum -Fantom Bridge and Ethereum -moonriver Bridge ,Celer On 2021 Introduced in the cBridge.
• The number of new networks that can be connected to Ethereum has increased .Avalanche、Ronin、Arbitrum One、Optimism and Solana On 2021 Launched in 2013 .
• Decentralized applications launched on chains outside Ethereum (dApp) Increase in the number of projects , And inspired the use of these systems .

Why should users bridge ？

Usually , Users want to connect from one network to another , Because they need ：

• Faster and cheaper transactions .
• Use non network native assets .
• Visit a wider range of dApp. Users may want to connect funds from Ethereum to Ronin The Internet , To access information specific to Ronin Applications for , Like their game dApp; Because some dapp Not deployed on Ethereum main network .
• Get extra income from the incentive plan . Many users choose to bridge , Because the target network or projects on the target network may send free tokens to their community members .

2021 What has happened since ?

2021 A lot of things happened in . stay 7 Month to 11 Between months , Many new dapp And new networks are launched . Ethereum's bridging activities peaked during this period . from 2021 From the fourth quarter of , Most bridges become quiet . However ,Polygon PoS This is not the case with bridges —— stay 2021 The number of deposit transactions in the whole year , We see strong and stable bridge flow , From Ethereum to Polygon The Internet , This eventually leads to Polygon PoS stay 2022 Leading cross chain traffic in the first quarter of 2013 .

The following diagram 1 Shows the daily deposit transactions of Ethereum bridge . Our theory is ,2021 year 9 month 11 The recent sharp rise is due to Arbitrum One The launch of .

chart 1 since 2021 Since then , The number of transactions deposited into Ethereum bridge every day .

Let's look at the dynamics of deposits and withdrawals in US dollars . The following diagram 2 Shows 2022 Daily deposits and withdrawals in US dollars in the first quarter of 2013 . We think , Some of the sharp rise in trading volume is driven by events ( for example , Start a new project 、 Airdrop 、 Incentive plan 、 Whale activity 、 Bridge loopholes, etc ).

• 2022 Before the total deposits in the first quarter of 2013 3 It is AnySwap Fantom bridge( green , about 84 Billion dollars )、Avalanche bridge( Pink , about 78 Billion dollars ) and Polygon PoS bridge( Blue , about 40 Billion dollars );
• 2022 The top three of the total withdrawals in the first quarter of the year were Avalanche bridge( Pink , about 105 Billion dollars )、AnySwap Fantom bridge( green , about 60 Billion dollars ) and Polygon PoS bridge( Blue , about 38 Billion dollars );

We also observed a very interesting pattern of capital movement , Especially in AnySwap Of Fantom In the bridge , A large amount of money was transferred to Fantom The Internet , Then withdraw the money to Ethereum main network in a short time .

chart 2 2022 Ethereum daily deposits in US dollars in the first quarter of 2013

How safe the bridge is ?

Like most new technologies , There are also some risks to consider . for example , There is such a risk ： The user's funds may be stuck in the process of deposit and withdrawal , Or they may become victims of cyber theft . When a user decides to connect to an asset , They should also be aware of the potential risks , So they can make more risk driven decisions .

Theft risk is the most common risk , Can cause the bridge contract to lose part or all of its funds . Here are some problems that can lead to theft ：

• Loopholes in smart contracts . Programming or logic errors can have a serious impact on bridge safety , Create opportunities for attackers , Steal locked funds from the bridge contract .

The latest example is 2022 year 2 Of the month Wormhole attack . The attacker found a vulnerability in the smart contract code , Forged... Without the approval of the bridge 120,000 individual Solana ETH, And in 2022 year 2 month 2 Withdrew from Ethereum on the th 80000 individual ETH. Fortunately, ,Jump Trading By way of 120,000 individual ETH Bridge contracts deposited in Ethereum to fill this gap .

chart 3 In dollars Wormhole Daily deposit and withdrawal of the bridge

• Custodian . Now , Most bridge applications rely on external authorities to interact with the bridge and withdraw funds . They are custodians of locked in funds —— They can be trusted parties ( Such as AnySwap Bridge ), It can also be a verifier pool bound by rights and interests ( Such as Polygon PoS Bridge and Ronin Bridge ). In this way, there is a risk that the custodian may compromise or take malicious action .

stay 2022 year 3 month 23 Japan ,Ronin The attacker destroyed Sky Mavis All four validation nodes running .Sky Mavis It was developed Axie Infinity game 、Ronin Network and Ronin bridge The company . Plus a fifth verifier ( from Axie Dao function ), The attacker controls most of the verifiers (9 Among the verifiers 5 individual ).

And then , The attacker without any verification , From Ethereum Ronin On the bridge 173600 ETH and 2550 Thousands of dollars in USDC.

chart 4 Ronin Bridge daily deposit and withdrawal in US dollars

• Malicious third 1 Layer miner / Verifier . If exceeded 50% Of the 1 The computing power or pledge of the layer is controlled by malicious miners or verifiers , They can attack the bridge on the chain , And steal locked funds . for example , After the asset is bridged to another network , They can resume the deposit transaction completed on Ethereum , This allows an attacker to withdraw funds from another network , You don't need to deposit on Ethereum . perhaps , They can prevent the bridge contract from getting updates from another network , This may cause significant losses to the user funds locked on the bridge .

These are unlikely to happen , But it's not impossible . In the worst case , If the asset locked on the utilized bridge has been bridged from another network , And in DeFi Used in applications , This may lead to cascading infection on multiple blockchain networks .

Bridge users should know , The damage caused by theft is usually irreversible .

We are right. 2022 What are you looking forward to in ?

in consideration of 2021 The explosive growth of the bridge in , We believe that the popularity of the bridge will continue to rise , In particular, we expect to see developments in the following areas ：

• Bridge demand . With the launch of more networks and bridges this year , We see more users want to build bridges between networks ;
• CEX. To 2022 year , More centralized exchanges will allow alt-Layer 1 and Layer 2 Direct deposit and withdrawal .
• The safety of the bridge . As more and more users are willing to bridge , More encrypted assets will be locked in bridge contracts —— Created a honeypot effect , Will increasingly attract hackers .
• Risk awareness . at present , Many transitional decisions are cost driven . We believe that people have different risk preferences . However , There is a big difference between choosing a bridge's risk weight and choosing a cheap bridge just because of its low cost .

With more information and discussion about bridge safety , Will more risk driven decisions be made when choosing bridges in the future , It will be interesting .

Source：https://medium.com/the-coinbase-blog/what-are-bridges-bridge-basics-facts-and-stats-8dd9449066a0

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