Mix-chain bridge hacks have taken into account 69% from the total crypto stolen in 2022, amounting to $2 billion in losses, according to a different report.
The report originates from blockchain analytics firm Chainalysis on August. 2, noting there has been 13 separate token bridge hacks this season — the newest to be the $190 million Nomad Bridge exploit.
Q1 2022 was undoubtedly the quarter that saw probably the most quantity of crypto stolen since 2021, due mainly towards the Ronin Bridge Attack at the end of March, which saw $624 million in Ether (ETH) and Circle USD (USDC) stolen.
Following last night’s exploit from the Nomad Bridge, an believed $2B continues to be stolen from mix-chain bridges to date in 2022. Read our blog to understand why is these protocols vulnerable and just what the can perform about this. https://t.co/WLo62H6NFe pic.twitter.com/CZRnqrPikh
— Chainalysis (@chainalysis) August 2, 2022
Mix-chain bridges, also referred to as blockchain bridges are made to transfer cryptocurrencies in one blockchain network to a different.
Chainalysis explains that while bridge designs vary, users typically deposit their tokens in one chain towards the bridge protocol that are then locked right into a contract. The consumer will be issued something like a parallel token in another chain.
Bridge vulnerabilities
Based on the Chainalysis report, bridges are frequently targets simply because they “feature a main storage reason for funds that back the ‘bridged’ assets around the receiving blockchain.”
“It doesn’t matter how individuals money is stored – secured inside a smart contract or having a centralized custodian – that storage point turns into a target.”
Based on some experts, effective bridge design continues to be in the nascent stages of development, and a few developers have relatively little knowledge of security protocols, making their protocols susceptible to exploitation by online hackers.
Inside a This summer 22 clip published on Twitter, almost two days prior to the recent attack, Nomad founder James Prestwich states it will likely be “a minimum of another couple of years before there’s enough familiarity across chain security models to construct defenses like a standard.”
“In mix-chain systems, we have not developed that sort of expert knowledge about attacks yet, individuals don’t understand what the most popular attacks are, and they also don’t reduce the chances of them.”
Centralized exchanges were when the favorite target of online hackers, but advances in security protocols have experienced a stop by effective cyber attacks, based on Chainalysis.
The blockchain analytics firm has stressed that cryptocurrency services, including bridges, should start purchasing security upgrades and training at some point.
“A valuable initial step towards addressing issues like this may be for very rigorous code audits to get the defacto standard of DeFi, for both individuals building protocols but for the investors evaluating them. With time, the most powerful, safest smart contracts may serve as templates for developers to construct from.”
