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On February 3rd, just as we were enjoying the Chinese New Year, another high-priced hacking incident occurred in the Crypto industry. The cross-chain protocol Wormhole was hacked, and the loss was as high as 120,000 wETH (about 320 million U.S. dollars). After the largest theft in DeFi history, this is the second largest amount stolen.

Coincidentally, the largest and second largest theft cases in the history of DeFi occurred in cross-chain projects, which can not help but make everyone worry about whether cross-chain is necessary, or in other words, it should not be there for security. cross-chain. And such worries can easily remind everyone of V God’s point of view that caused many discussions some time ago, "the future will be multi-chain, and we are pessimistic about cross-chain applications."

What happened to this theft incident, will the cross-chain really be like V God? Let us talk about how the practitioners of the Polkadot ecology will view this theft.

Theft is not a crime of cross-chain, the cross-chain market still has a bright future

So what happened to the Wormhole being stolen? Does the theft of Wormhole indicate the end of the "cross-chain" market? Before explaining these two questions, let's review what exactly is a Wormhole?

Wormhole is Solana, Ethereum's first two-way cross-chain bridge. Wormhole allows users to lock ERC20 tokens in Ethereum smart contracts and mint corresponding SPL tokens on Solana. As the largest cross-chain bridge on Solana, Wormhole also has NFT authentication tools that can send Ethereum and Solana NFTs across the chain, including CryptoPunks, one of the most popular NFTs at the moment.

At present, the value locked in Wormhole exceeds 1 billion US dollars, and it supports six major public chains including Terra, Solana, Ethereum, Binance Smart Chain, Avalanche and Polygon. As a high-profile star project, Wormhole's future seemed bright until this theft happened.

Overnight, 120,000 wETH, worth about $300 million, was stolen, making it the second largest hacking incident in DeFi history.

Both the Wormhole incident and the PolyNetwork incident occurred on the cross-chain protocol. Does it mean that the cross-chain protocol is the original sin? Let's do a simple restore of events.

At first, the attacker minted 0.1 Wormhole ETH on Solana, got the "post_vaa" function in the "transfer message" contract, and then bypassed the signature check contract by loading an external contract, and generated the Wormhole function "complete_wrapped" required Parameters, and then infinite minting. The root cause of all this is that Wormhole used outdated system contracts without the latest upgrades to the contracts required by the parameters.

In one sentence, the hacker obtained a function through a small amount of attempt, bypassed Wormhole’s protocol verification through an external contract, and defrauded 120,000 ETH (wETH), and successfully transferred 93,750 ETH, and the remaining wETH Was urgently locked in Solana. And this not only brings losses to Wormhole, but may even lead to the depreciation of wETH, and eventually lead to the insolvency of some projects based on it.

The Wormhole incident once again sounded the alarm for us, pushing the security issues of cross-chain protocols to the stage of history. It sparked a heated discussion in the community. V God’s argument on "cross-chain" at the beginning of the year was once again dug out from the pile of old papers, which seems to be a divine prophecy.

V God pointed out in his Reddit release, "Imagine if you move 100ETH to a bridge on Solana to get 100Solana-WETH, and then Ethereum is attacked by 51%, what will happen?

The attacker deposits a bunch of their own ETH into Solana-WETH, then restores that transaction on the Ethereum side as soon as Solana side confirms it. The Solana-WETH contract is no longer fully supported now, maybe your 100Solana-WETH is only worth 60ETH now. Even with a perfect ZK-SNARK based bridge to fully verify consensus, it would still be vulnerable to theft from such 51% attacks. "

But is it really so? But in fact, the question raised by V God has nothing to do with the Wormhole incident.

Vitalik pointed out that due to the generation of many interdependent DApps across chains, when any chain is attacked by 51%, it may lead to systemic infection, and then threaten the economy of the entire economic system. He believes that applications on Ethereum should be tightly connected to each other, and applications on Avax should be closely connected to each other instead of cross-chain. Cross-chain reduces the ability of the entire blockchain system to resist 51% attacks.

There is no 51% attack in the Wormhole incident, nor is it a theft caused by a systematic infection, but only a contract loophole. Theft is not a cross-chain crime.

Although we have to admit that "It is always better to hold Ethereum-native assets on Ethereum or Solana-native assets on Solana than to hold Ethereum-native assets on Solana or Solana-native assets on Ethereum." Safety."

Behind the theft of cross-chain assets is not the crime of cross-chain, but its rapid development of locked positions and complicated processes. The huge amount of funds and the challenging cracking process are like a huge cake attracting the attention of hackers.

The Wormhole incident and the PolyNetwork incident were caused by loopholes in the contract, which further made the project party think about it. It seems that more caution is needed in the verification of cross-chain transaction events and the design of contract authority management.

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How does the ecology view this cross-chain theft?

As Polkadot is one of the most well-known cross-chain projects, everyone must be very concerned about the situation of Polkadot. We kindly invited Chen Xiliang, the co-founder of Acala, Yuki from the Moonbeam Chinese community, and Song Mingshi, the head of the Astar Chinese area, to see See how they view this cross-chain theft. Note: The following are just personal opinions.

Chen Xiliang, co-founder of Acala:

At present, it is generally believed that the future blockchain ecology will be a multi-chain ecology. Because different blockchains can be optimized for their respective application scenarios, it should be technically impossible for a single chain to be superior to all other chains from an all-round perspective.

Each chain is like a server, although it can run a variety of applications, but we can have today's Internet, literally, because each server is directly interconnected.

The cross-chain bridge is one of the technologies that allow different blockchains to communicate with each other. Including Wormhole, mainstream bridges are semi-centralized technologies based on threshold signatures. If the signers cooperate to do evil, or the private key is leaked, or there is a loophole in the signature verification scheme (this Wormhole loophole), the attacker can almost Unlimited issuance of cross-chain assets, causing serious losses.

So what does this mean? Is it because the Wormhole team is not skilled enough? Why do almost all mainstream cross-chain bridges still use this technology knowing that this semi-centralized cross-chain technology has such a big security risk?

The main reason is that many L1s, including Bitcoin and Ethereum, did not consider cross-chain compatibility when they were designed, making it very difficult to implement a more secure cross-chain technology.

The mainstream L1 is an EVM environment, and the encryption algorithms supported by EVM are very limited, and directly using EVM to implement encryption algorithms that require a lot of calculations will lead to very high gas, even exceeding the maximum gas supported by a block. This makes the simple and easy-to-implement multi-signature bridge the most cost-effective choice.

A multi-signature bridge like Wormhole may be the best solution at present, but it does not mean that this will be the most suitable long-term solution.

Polkadot's shared security design solves one of the most difficult problems in handling cross-chain messages from the consensus level: rollback attacks. If you want to roll back a parachain, you have to roll back the Polkadot main chain, and all other parachains will be rolled back at the same time. If everyone rolls back together, there will be no data inconsistency.
W3F also designed and implemented the general format of XCM cross-chain messages for Polkadot, laying the foundation for more complex cross-chain interactions, including cross-chain contract calls, cross-chain messages of more than two chains, etc., providing cross-chain technology A solid foundation.

The Acala team was the first to participate in the design and testing of the XCM version. It was the first to realize the cross-chain transfer in the test, and Karura was also the first network to realize the cross-chain function in Kusama.

At present, Karura has launched a secure cross-chain transfer through XCM and Kusama, Statemine, Bifrost and other chains, and also realized a completely decentralized cross-chain pledge derivative product LKSM through XCM, allowing users to enjoy Kusama pledge While earning income, you can participate in various DeFi protocols on Karura through LKSM.

With the maturity and improvement of cross-chain technology, we will see more different types of cross-chain applications in the Polkadot ecosystem, truly realizing the vision of blockchain Internet in Web3.

Yuki, Moonbeam Chinese Community Manager:

The islands of information between blockchains are gradually weakening, and developers are quickly realizing the opportunities of cross-chain bridges in a multi-chain world. Users are increasingly demanding to use assets across blockchains. Cross-chain bridges, as "diplomats" that cross different ecologies and carry asset flows, are to ensure that users can obtain and use cross-chains under the premise of safety and low cost. Key elements of assets.

In the Moonbeam ecosystem, we are very pleased to see many cross-chain bridge developers working hard for security and interoperability, such as Nomad, Axelar, Cbridge, Multi-chain, Connext and other teams, and look forward to more solutions to user realities in the future. The required cross-chain bridge project improves the interoperability and security performance between different chains.

Song Mingshi, head of Astar China:

The cause of the Wormhole cross-chain theft incident was that hackers minted wETH on Solana by deceiving the guardian’s signature and unlocked the stolen ETH assets on Ethereum, which once again sounded the alarm for cross-chain security.

At present, the most common cross-chain solution is still the heterogeneous cross-chain bridge realized through the notary mechanism, which is realized by locking assets on chain A and issuing new assets on chain B with a 1:1 mapping. Mainstream cross-chain bridges include Multichain, cBridge and so on all use the notary scheme.

The security risk of heterogeneous cross-chain bridges essentially comes from the inconsistency of different security states of chain A and chain B. In contrast, Polkadot's XCMP cross-chain mechanism completely eliminates such problems.

The security between the Polkadot parallel chains is shared. The messages and asset transfer information between the parallel chains will be packed into the input and output queues by the parallel chain collectors, and then verified by the relay chain validators. The whole process is guaranteed by the same group of validators at the same time. The correctness of cross-chain messages and the security of the chain do not need to trust third-party verifiers, nor do they involve security differences. From this perspective, Polkadot's cross-chain mechanism can well solve the dilemma of interoperability and cross-chain security in a multi-chain context.

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Setbacks cannot stop the wheel of history

Although there have been many cross-chain project theft incidents, and the amount is huge, and because it involves multiple chains and applications, it has a wide impact, but from the perspective of technological progress and business development, there has been no hacker problem in history. And hinder the progress of development.

Hacking incidents are due to loopholes in the design mechanism or code level, which are exploited by hackers to cause property losses. It is a man-made accident, not because of a technical bottleneck that cannot be broken through, so there are many ways to digest and deal with such problems. Mainly prevention in advance, remediation after the event and new solutions.

1. Prevention beforehand

Code auditing is already a necessary step for the current project party to go through before the official launch of the project. It can find and solve most of the low-level errors and avoid the loopholes that have appeared before, so as to greatly improve the security of the project.

However, code auditing is mainly for defense and relying on experience. In the face of some emerging technical solutions, hackers who are often the attackers can find some new loopholes in the code that has been audited. However, mature technologies often It is through continuous polishing and iteration. When more and more vulnerabilities are discovered and solved, and a technology is mature enough, the probability of hacking incidents will be much lower.

Of course, one of the most important prerequisites is that this market is real and effective, and will not be hit to death due to hacking incidents, so as long as the demand is still there, there will still be applications developing in this direction. On the basis of predecessors, it will be better and safer. Only in this way can the technology be more mature.

2. Remedy after the event

① Direct and effective, solved with money

Remedy after the event, although it feels a bit like an afterthought, but if you look at it from another angle, it can be seen as it is not too late to make up for it.

At the beginning of Alipay, due to the relatively new technology and many loopholes, thefts often occurred. At that time, Alipay adopted the method of money, so that everyone can use it with confidence. If there is a loss, they will be fully compensated, which is equivalent to using money. To ensure that this technology can survive the novice period and mature, Alipay has built a huge security fortress, which is impenetrable.

In the same way, in the face of the theft incidents in the Crypto field, if there is no problem with your own business, and the market is large, and losses due to loopholes occur, then if you pay for these losses and fix the loopholes, you can still continue operational.

The same method was used to solve the $320 million hacking incident of the cross-chain protocol Wormhole. Just after the attack, Jump Crypto, the encryption investment arm of Jump Trading, intervened in time and replenished 120,000 ETH out of its own pocket. Just one day later, the Wormhole bridge was back online.

② Solve it with technical means

The project party can roll back the blockchain to the time before it was attacked, so as to prevent hackers from succeeding. For example, the Haven Protocol, a Monero-based privacy stablecoin protocol, has resolved the impact of being hacked by rolling back and repaired the minting loopholes.

Another example is the most classic Ethereum "The DAO" hacking incident. Finally, the stolen assets were recalled by hard forking the Ethereum at that time and rolling back the transaction. However, Ethereum was also split into two Different projects Ethereum Classic (ETC) and Ethereum (ETH) as it is known today.

③ By means of governance

At present, all public chains are moving towards decentralized governance to manage the future development of the chain and handle related affairs. For example, EOS once established an ECAF organization (The EOS Core Arbitration Forum, EOS Core Arbitration Organization) to deal with stolen funds.

Therefore, on-chain governance will be a direction worth exploring, and will even become an important part of the future blockchain field. How to arbitrate some behaviors in a decentralized way, and actively intervene in some bad behaviors, so as to ensure the healthy development of the ecology, will be a big problem, but once there is a successful and feasible plan, it will It quickly spread to various blockchains, escorting the development of each chain.

④Mobilize the power of the community

For example, some encrypted assets are issued through the endorsement of centralized institutions, such as USDT, then the stolen funds can be frozen by contacting these institutions. Or use some governance forces outside the circle, such as the police and other administrative forces, to put pressure on hackers and even track them down, thereby forcing hackers to return funds, or arrest hackers, etc.

The largest theft case in DeFi history, PolyNetwork, can be successfully resolved, thanks to the strength of the community.

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There are problems with the old solutions, but the technology is still advancing, and maybe the previous problems will no longer be difficult with the introduction of the new technology. For example, the more decentralized cross-chain interaction method launched by Polkadot is worth following.

Another example is that in terms of mechanism design, it is not necessary to rely only on the "decentralization theory". There are also many semi-decentralized technical solutions that can be considered, or the governance parties of multiple public chains can be combined in the design to jointly take Set up some governance funds to build some insurance fund pool mechanisms, or establish some similar joint treatment plans (such as rolling back at the same time when cross-chain theft occurs).

Again, as long as the market still exists, it cannot stop the progress of the wheel of history. The hacker problem is not just a problem in the blockchain field. As long as there are new technologies, it will go hand in hand, but it is precisely because of these incidents that we will be more active in iterating technology. I believe that eventually the blockchain world will also It will definitely develop into an impregnable mature technology.

postscript

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postscript

Just a few days ago Gavin mentioned the new upgrade of XCM, we need to pay close attention to its development.

Last week, Polkadot founder Gavin Wood shared Polkadot's latest technological progress on Twitter. He said that the infrastructure of the XCM v3 bridge is almost ready, which means that parachains on Polkadot can send XCM to each other , can also be sent to a parachain on Kusama.

*The information provided by the Polkadot Ecological Research Institute does not represent any investment hints. The published articles only represent personal opinions and are for reference only. Since there are no policies and regulations related to digital assets in China, users in mainland China are requested to pay close attention to the development of Crypto.

*The information provided by the Polkadot Ecological Research Institute does not represent any investment hints. The published articles only represent personal opinions and are for reference only. Since there are no policies and regulations related to digital assets in China, users in mainland China are requested to pay close attention to the development of Crypto.

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