Cross-chain bridges have become an important part of Web3 innovations, enabling seamless interoperability across blockchain ecosystems. However, they also present one of the most significant security challenges in decentralized finance (DeFi).
According to DefiLlama, cross-chain bridge hacks have accounted for over $2.8 billion in stolen funds—nearly 40% of all Web3-related hacks. These staggering numbers highlight glaring security risks and vulnerabilities that threaten the trust and adoption of decentralized systems.
In this article, we will discuss the security risks of using cross-chain bridges, explore why they occur, and analyze real-world breaches that emphasize their risks. Most importantly, we will outline actionable strategies to mitigate these vulnerabilities and strengthen the security of cross-chain bridges.
What Are Cross-Chain Bridges?
Cross-chain bridges are a type of decentralized application that facilitates the transfer of assets from one blockchain to another.
Cross-chain bridges enable users to transfer assets and data between different blockchain networks, enabling ecosystem interoperability. These bridges solve the problem of blockchain siloing, allowing users to access the benefits of multiple blockchains without being limited to a single network.
For example, users can move Ethereum-based assets to Solana to benefit from faster transactions and lower fees. The bridge locks the original assets on Ethereum and mints equivalent tokens on Solana, maintaining the total supply across chains.
That’s why if you’re a user, developer, or institution looking to go cross-chain, it’s imperative that you understand these cross-chain bridge risks to keep yourself, your users, and your stakeholders secure.
Unaudited Smart Contracts
Because cross-chain bridges primarily move value between blockchains, they inevitably rely on smart contracts. Most cross-chain use cases leverage smart contracts on multiple chains to mint, burn, lock, or unlock tokens as they traverse chains. These smart contracts, often in collaboration with token issuers, connect through cross-chain bridges.
Smart contracts can both enhance security and introduce risks. On one hand, they enforce security checks like withdrawal limits and rate limits. On the other hand, poorly written and unaudited contracts can be exploited by malicious actors.
While no project can guarantee perfect code, external audits are a proven method to identify and mitigate vulnerabilities. However, ongoing vigilance is crucial, as changes to audited code or the introduction of unaudited contracts can reintroduce risks.
Real-World Cross-Chain Bridge Exploits Due to Smart Contract Risk
- Meter.io: A faulty assumption in Meter.io’s bridge code regarding wrapped native token deposits enabled attackers to withdraw native tokens without any matching deposits.
- Wormhole Bridge: Hackers exploited verification steps in Wormhole Bridge’s smart contract to mint 120,000 wETH on Solana without the required collateral.6
- Binance Bridge: A flaw in the IAVL Merkle proof verification system within Binance Bridge’s smart contract was exploited, resulting in 2M BNB being transferred to the attacker.
Compromised Private Keys
Private keys, or sets of private keys, are critical to managing cross-chain bridge operations. Bridge operators, each holding a unique private key, must reach consensus on user-initiated messages or asset transfers across chains. They do this by approving messages with a digital signature or a quorum of signatures derived from their private keys.
Compromised private keys remain a major vulnerability in cross-chain bridges. Many notable hacks have exploited poor private key management or weak operational security.
To improve security, bridges can decentralize operations across multiple servers, infrastructure providers, geographic locations, and operators. This reduces the risk of a single point of failure and makes it harder for malicious actors to compromise multiple private keys.
However, decentralization alone is not enough. Bridge operators must also implement strong security measures to protect individual private keys. This includes using hardware security modules (HSMs), encrypting data, educating operators about phishing risks, enforcing access controls, and using key management services.
Combining decentralization with strong private key security practices better protects cross-chain bridges against internal and external threats.
Real-World Cross-Chain Bridge Exploits Due to Compromised Private Keys
- Ronin Bridge: Hackers compromised five out of nine private keys, allowing them to facilitate, approve, and execute unauthorized transactions on the Ronin Bridge multisig.
- Multichain Bridge Hack: The Multichain CEO controlled all compromised private keys, enabling unauthorized withdrawals from the cross-chain bridge.
- ALEX Bridge: A suspicious contract upgrade by the protocol’s deployer account led to $4.3 million in unauthorized withdrawals. Security firm CertiK attributed the incident to a possible private key compromise.
Unsafe Smart Contract Upgradability
Upgradability allows developers to update smart contract code or change parameter configurations.
By default, smart contracts can not be edited once deployed. Developers use upgradable contracts to add features, fix logic errors, and modify risk parameters. For cross-chain bridges, this enables support for new tokens and blockchains, implementation of new validation methods, adjustment of risk parameters, and quick fixes for logic errors.
Secure upgradability is crucial. A flawed upgrade process can create new attack vectors. A defense-in-depth approach, including robust private key management, timelock delays, and approval processes, is essential. Timelock delays allow users to review changes before they take effect, while explicit approval can be used for urgent upgrades.
Upgradability is vital for adaptability, but it can also introduce vulnerabilities. Timelock contracts and node-veto mechanisms are important safeguards, but secure cross-chain bridges must balance these with the need for flexibility in time-sensitive situations.
No Rate Limits
Rate limits are a fundamental security measure used in various software systems to prevent abuse and overload. Websites use them to thwart denial-of-service (DoS) attacks, while data providers employ them to manage API requests and avoid server strain. The principle is simple: limit the number of requests based on time and volume.
In the context of cross-chain systems, rate limits restrict the amount of value that can be transferred between blockchains within a specific timeframe. This crucial security measure serves as a final line of defense for cross-chain bridges. Even if a hacker circumvents other security mechanisms, rate limits can significantly curtail the amount of value they can siphon.
Hackers have exploited cross-chain bridges without rate limits to drain all available value in a short period. All of these attacks could have been mitigated by implementing rate limits and an emergency halt feature, assuming no underlying logic errors existed.
To enhance security and modularity, define rate limits for each individual lane of a cross-chain bridge. Additionally, implement an aggregate rate limit to cap the total value transferred across all assets within a lane. For instance, setting throughput rates (e.g., X tokens every 10 minutes) can deter malicious actors from draining an entire bridge with a single transaction. Furthermore, applying “refill rates” to cross-chain assets and lanes can further protect against attackers waiting for limits to reset before exploiting the maximum allowable value.
Conclusion
In this article, we have explored the vital role cross-chain bridges play in enabling interoperability across blockchain networks. We identified common vulnerabilities, such as compromised private keys and flawed smart contracts, that frequently undermine these bridges. We also emphasized the need for strong security measures, including rate limits, upgradability, and decentralized governance, to address these risks effectively.
As the blockchain ecosystem evolves, prioritizing security is critical to maintaining user and developer trust. Cross-chain bridges offer a convenient way to transfer blockchain assets across multiple chains quickly and easily. However, their complex architecture introduces multiple points of failure, requiring careful scrutiny to ensure safe usage.
To use bridges securely, users must verify that robust security measures are in place, including the integrity of on-chain smart contracts, protocol implementations, and the underlying network layer. For those who find this process overwhelming, sticking to native tokens within their respective blockchain networks offers a safer alternative and minimizes the risk of asset loss.
