Raided

Thieves stole $190M from a crypto cross-chain bridge, but the risk to decentralized finance is about more than $$

Friday, August 5, 2022 by Robinhood Snacks |

Cross-chain bridges… pave the way for highway robbery. Nomad, a crypto protocol that helps people bridge coins and tokens between different blockchains (think: moving USDC from ethereum to moonbeam), lost $190M to a freewheeling hack on Monday. After someone spotted a security vulnerability in Nomad’s smart contract, potentially hundreds of people got in on the theft, striking a reputational blow to key crypto infrastructure. But the problem’s bigger than just Nomad.

Crypto bridge… is falling down. Nomad is only the most recent example of cracking crypto bridges. Wormhole was hit with a $325M hack in February, $625M was boosted from Ronin in March, and $100M was lifted from Harmony in June. In other words, cross-chain bridges are increasingly taking a beating. Just this year:

  • 69% of all stolen crypto has been looted from bridges (as opposed to exchanges or individuals).
  • $2B has been stolen from crypto bridges in at least 13 cross-chain bridge hacks.
THE TAKEAWAY

Cross-chain bridges are critical for crypto… but their shaky foundations put the #FutureOfFinance at risk. Different blockchains (think: bitcoin, ethereum, solana) are kind of like walled-off crypto kingdoms, with cross-chain bridges as the toll roads letting traders move coins (and Ape NFTs) between them. No bridges = no trade, making cross-chain bridges crucial to decentralized finance (DeFi). But like on the roads of old, robbers are hiding in the digital bushes — and they're getting bolder. Bridge security will have to get its act together if blockchain kingdoms are to potentially flourish.