Blockchain Bridge Security – What Are The Risks?
Since users need to lock their assets into smart contracts as part of their usage, the individual protocols hold enormous amounts of value. This makes them a preferred target for attacks.
Unfortunately, many protocols have vulnerabilities that can be used for crypto bridge exploits and hacks.
As centralized services, trusted bridges entail custodial and censorship risks for users. Custodial risk means that the operators of the bridge could steal the users’ funds. Censorship risk means that operators can stop the transfer of funds.
Decentralized crypto bridges also have vulnerabilities due to their underlying code and algorithms. Faulty smart contracts and other technology risks are among the main reasons for stolen crypto funds in recent years.
According to Chainalysis, cross-chain bridge hacks accounted for almost 70% of all stolen funds in 2022.
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