Cross Chain Bridge and its use in the cryptocurrency market.
Cross Chain Bridge, also known as Blockchain Bridge, typically functions as a bridge between two different blockchains, that connects the gap, facilitating the transaction from one chain to another. From a layman’s perspective, the Cross Chain Bridge can be explained by using an example. If an investor has a X value of bitcoins in his wallet, but he wants to use another cryptocurrency like the Ethereum for the same value as of Bitcoin, then the investor’s transaction is facilitated by the cross-chain bridge.
Cross Chain Bridge, while the concept seems interesting and viable from the outset, is not actually what it promises to be. A lot of complexities are involved in facilitating a transaction from one blockchain to another. One of the serious problems for the functioning of block chain bridge is the inability to work together. Another impending problem that has surrounded the Cross Chain Bridge from all sides are the increasing cases of exploitations.
According to a study done by Chainalysis, it was revealed that, in 2022, till date, around $2 billion was stolen from Cross-Chain Bridge. If the figures are accurate, then Cross Chain Bridge’s contribution to the exploitations in the cryptocurrency market would expected to bemore than 3/4th of the entire crimes occurring in the market.
Cross Chain Bridge exploitations.
Credits: Moneycontrol
Recently, Nomad, a Cross-Chain Bridge was exploited of $190 Million by the exploiters, draining all the cryptocurrencies from the wallet. It was reported that, after the exploitation, the wallet only had cryptocurrencies that cumulatively added up to $650.
Axie Infinity also recently announced that, the cross-chain bridge was exploited and the exploiters stole around 173,600 Ethereum tokens and around 26 Million in USD Coin.
Chainalysis report:
According to the Chainalysis report, in the year 2022, around 13 cross chain bridges have fallen victims to the exploiters, robbing $2 Billion from the market. The study revealed that, the first quarter of 2022 saw more crypto stolen than the entire year of 2021.
Why’s are exploiters easily victimizing the Cross-Chain Bridges? Let’s find out!
It is reported that, Cross-Chain Bridges are made easy targets because they have a feature of central storage point for funds that back bridged assets on the receiving blockchain. This storage unit is not well secured, which the exploiters make full use of. According to experts, a good, secure and effective cross bridge is in its nascent stage and will take a long time to build the required security to protect the bridges from falling prey to the exploiters.
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