According to a recent report, cross-chain bridge attacks were responsible for 69 percent of all cryptocurrency losses in 2022, or $2 billion in damages.
The research, released on Tuesday by blockchain analytics company Chainalysis, noted that 13 different token bridge breaches have occurred this year, with the most recent being the $190 million Nomad Bridge flaw. Due mostly to the Ronin Bridge attack in late March, which resulted in the theft of $624 million in Ether (ETH) and USD Coin (USDC), Q1 2022 witnessed by far the largest crypto stolen since 2021.
Meanwhile, bridges are frequently targeted because they “include a central storage location of money that support the ‘bridged’ assets on the receiving blockchain. As more value flows through cross-chain bridges, they become more attractive victims for hackers,” claimed the Chainalysis research.
“Effective bridge design is still an unresolved technical challenge, with many new models being developed and tested. These varying designs present novel attack vectors that may be exploited by bad actors as best practices are refined over time,” the report stated.
The blockchain analytics firm has stressed, “A valuable first step towards addressing issues like this could be for extremely rigorous code audits to become the gold standard of DeFi, both for those building protocols and for the investors evaluating them. Over time, the strongest, safest smart contracts can serve as templates for developers to build from.”
Centralised exchanges were once the favorite target of hackers, but advances in security protocols have seen a drop in successful cyber attacks, according to Chainalysis.
According to Chainalysis, bridges are often targets because they “feature a central storage point of funds that back the ‘bridged’ assets on the receiving blockchain. Regardless of how those funds are stored, locked up in a smart contract or with a centralized custodian that storage point becomes a target.”