Which of the three popular Trustless cross-chain bridges is better or worse?

This article will mainly start from the security of the asset cross-chain bridge, classify it according to who is verifying the system, and select three Trustless cross-chain bridges that have been very popular recently, from their respective operating principles, teams, investment and financing, and costs, etc. Summarize the advantages and disadvantages.

The following content is for reference and communication only, and does not constitute investment advice. If there are obvious errors in understanding or data, feedback is welcome.

With the advent of the multi-chain era, the requirements for the interoperability of the blockchain network are getting higher and higher. Starting from 2021, the cross-chain bridge will show an explosive growth. Cross-chain bridges can transmit “information”, and the information here is not only assets, but also smart contract calls, identity certificates, and state interactions. As of the end of April 2022, more than 65 cross-chain bridges have emerged in the crypto world.

Cross-chain bridges can solve the problem of insufficient liquidity. In addition to playing an important role in asset extradition, cross-chain bridges can also solve the problem of insufficient performance of the underlying public chain. For example, the current Ethereum Layer 2 can help transfer the transaction throughput from one layer to the off-chain system. The whole process is handled by bridges. Safeguarding funds and releasing a layer of huge transaction volume pressure. However, such bridges also have certain drawbacks. As a blockchain network independent of the main chain, most of them only focus on their own security model, so they have a certain degree of security risk.

The ideal cross-chain bridge, on the premise of ensuring that the cross-chain environment is highly transparent and tamper-free, can not only satisfy the interaction of assets and other information, but also have extremely high security guarantees, and achieve higher performance compatible with the protocols of various public chains, Consensus of categories such as applications and transactions. ** According to this model, the role of “middleware” of the cross-chain bridge can be recognized by the market and used more frequently, and the development of the industry can also enter the era of indiscriminate cross-chain interaction.

This article will mainly start from the security of the asset cross-chain bridge, classify it according to who is verifying the system , and select three Trustless cross-chain bridges that have been very popular recently, from their respective operating principles, teams, investment and financing, and costs, etc. Summarize the advantages and disadvantages.

Classification of cross-chain bridges

Safety and speed have always been the top priority of the cross-chain bridge. Since the Layer 2 cross-chain bridge on the market is mainly built on Ethereum, if we put funds on Layer 2, the funds are still protected by the verifier of Ethereum; if we transfer the assets on Arbitrum through the cross-chain bridge To Optimism, then Arbitrum and Optimism themselves are also secured by Ethereum. The validator is on Ethereum. The strong consensus foundation of Ethereum provides extremely high security, but the bridge protocol uses a set of external validators, and the funds are no longer protected by Ethereum, but by the bridge validator, According to the barrel principle, it is its weakest part that determines safety.

Therefore, according to who is verifying the system, we can divide it into the following three categories:

native authentication

It does verification by running a light client of the source chain in a virtual machine of the target chain.

如 IBC、BTC Relay、Near Rainbow Bridge、Polkadot SnowBridge、LayerZero、Movr、Optics、Gravity Bridge 等。

Which of the three popular Trustless cross-chain bridges is better or worse?

external validation

This type of verification method has one or a group of verifiers, and the verifier needs to monitor the specific address of the source chain. Users send assets to specific addresses on the source chain to lock them, third-party validators verify this information, and consensus is required. When the consensus is reached, the corresponding assets will be generated on the target chain.

Cross-chain bridges of this type include Synapse, Thorchain, Anyswap, PolyNetwork, WBTC, WormHole, Qredo, Ronin, etc.

Which of the three popular Trustless cross-chain bridges is better or worse?

There are two main types of validators of this type:

One is to have a managed principal . The transferred assets are held by the custodian, which requires full trust in the custodian. This model depends entirely on the trustworthiness of the bridge operator itself. Essentially, they can take away the user’s native assets and make cross-chain assets lose their value. For example, if the custodian of wBTC takes all the BTC that supports the value of wBTC, then wBTC will become worthless, although this probability is very small.

The other is a set of validators . In order to become validators, they need to bind assets to prevent evil. Bound assets can also be divided into two categories. One is to bind the corresponding cross-chain assets. For example, in order to achieve cross-chain BTC or ETH, validators need to bind BTC or ETH. The other category is for token assets bound to their own protocols. For example, Thorchain binds RUNE, and Synapse plans to bind its own token SYN in the future to ensure the security of its chain. In this model, bridge participants have the opportunity to steal users’ funds, but they should not do so due to the “game” mechanism (that is, pledge their own funds, accompanied by a penalty mechanism for stealing funds).

The local verification protocol described below transforms the complex multi-party verification problem into a simpler set of two-party interactions, where each party only verifies the counterparty, and this model works as long as the two parties are economically adversarial—that is, both parties Inability to collude to obtain funds from the wider chain.

local authentication

Local verification is a partial verification mode and a peer-to-peer liquidity network. Each node is itself a “router”, and the router provides the original assets of the target chain, not derivative assets. Additionally, routers cannot withdraw user funds through locking and dispute resolution mechanisms.

Which of the three popular Trustless cross-chain bridges is better or worse?

Such models include Hop, Connext, Celer, Liquality, etc. This peer-to-peer model performs relatively well in terms of security, cost, speed, and multi-chain connection expansion.

Which of the three popular Trustless cross-chain bridges is better or worse?

Comparison of the advantages and disadvantages of each verification system

Summarize

The external verification mode to build a cross-chain bridge has the advantages of faster speed, lower cost, universal data transmission, easier multi-chain connection, and better user experience, but the potential disadvantage of this model is its security. Due to the introduction of the role of external actors, the security of users depends not only on the security of the source chain or the target chain, but also limited by the security of the bridge. In the process of transferring assets across chains, if the bridge is not secure, the assets will be at risk.

The native verification mode is a cross-chain bridge that does not require trust, it does not have the potential security trade-offs of third-party verifiers, and can transmit various general data. The security of the cross-chain bridge is related to the security of the blockchain itself. The financial security of users is not affected by the bridge itself. If there is a security problem, it is also the problem of the chain itself. At the same time, there is no need to pledge assets (higher capital efficiency). But the model lacks enough activity and multi-chain connectivity. Between any two chains, developers need to develop and deploy new light client smart contracts on the source and target chains. In addition, it has the disadvantage of being slower and more expensive.

The local authentication mode uses the mode of the mobile network. It uses local validation and does not require global validation, so it is faster and less expensive. ** Relatively speaking, its capital efficiency is higher than the external verification model and lower than the native verification model. At the same time, the throughput of the peer-to-peer liquidity network is also greater. Of course, it also has its downsides. It has limitations in information transmission and cannot achieve universal information transmission.

development trend

Different models of cross-chain bridges have different trade-offs. Therefore, at different stages, according to the different needs of users for speed, cost, versatility, security, etc., cross-chain bridges of different models may achieve different effects at different stages. In the early days, external verification mode and local verification mode may gain faster development speed due to empirical advantages in cost and speed. With the emphasis on security and the development of technology, the native verification model may also be gradually developed in the later stage.

Over time, some cross-chain bridges will gradually gain the upper hand and become major players in the cross-chain bridge market. With the continuous in-depth development of Layer 2, cross-chain bridges will become an important part of the future multi-chain era.

List several cross-chain bridges

  • Hop protocol

Which of the three popular Trustless cross-chain bridges is better or worse?

How it works

Which of the three popular Trustless cross-chain bridges is better or worse?

rollup and rollup transfer

The ETH officially minted by Arbitrum is transferred to hETH through AMM, and then the hETH on the Arbitrum chain is locked through the bridge contract, hETH is minted on another bridge, and then converted into ETH officially minted by Op through the AMM deployed on Op.

No interaction with Layer 1 is required during this process.

Which of the three popular Trustless cross-chain bridges is better or worse?

roll up and L1 transfer

The user sends an ETH redemption request from the Op chain on the Hop protocol, and the Hop protocol informs the Bonder. The Bonder confirms the advance of the asset and sends the ETH to the user on Layer 1. The user receives it immediately, and the challenge period ends, and the Bonder gets the ETH withdrawn by Layer 1.

At this time, it needs to interact with Layer 1. Because of the competition, Bonder needs to pay the gas fee by itself. In order to reduce the cost, multiple transactions will be mixed into one, so the time required to complete the interaction is uncertain.

The Hop protocol has three important roles:

00001. AMM : As an automated market maker, it provides liquidity for different cross-chains.

00002. Bridge contracts : Responsible for network transfers, providing liquidity.

00003. Bonder : Advance payment for chains with challenge periods.

cost

The above fees are in USD

Note: The data in this table is the calculation when Ethereum is $2650, and the cost changes with the change of Ethereum gas cost. Due to different measurement times and network congestion, the results fluctuate greatly and are for reference only.

Team situation

Shane Fontaine : Ethereum developer, co-founder of Authereum, and organizer of the Ethereum meetup in the Los Angeles area. He was the chief crypto developer of CoinCircle, participated in the development of Level K, and also served as a technical consultant for UNIKOIN and Synapse Capital. , has written many smart contract codes in Solidity language.

Lito Coen : Founder of Crypto Testers, also responsible for business growth at Hop Protocol. He has invested in more than ten projects in the Web3 space. Previously, he was SatoshiPay Business Development Manager.

Christopher Whinfrey : Co-founder of Authereum, developer of decentralized applications, previously the founder of Level K.

Investment and Financing

The financing information is unknown, and currently only disclosed investors include 1confirmation, 6th man ventures, infinite capiutal, etc.

  • Connext

How it works

Auction: Users are paired with liquidity providers who provide liquidity for transfers, lock your DAI on Op, and provide DAI on Arbitrum.

Preparation: At this stage, both parties lock funds for transfer – the user on the sending chain and the router on the receiving chain.

Fulfillment: At this stage, both parties unlock funds for transfer. Users provide a signature to unlock their funds on the receiving chain, and liquidity providers use the same signature to unlock funds on the sending chain.

specific process

00001.sender broadcasts a transaction request to the NATS message network

00002.router monitors the network, quotes, the network automatically selects a low-cost router

00003.sender paired with router

00004.sender sends asset and quotation information to the nxtp contract, and the contract broadcasts a signal that the transaction is ready to complete

00005.router sends transfer preparation to nxtp

00006. The sender sends the information and signature required for the allocation to the relayer, and the relayer assists in sending the allocated transaction to the nxtp contract of the receiver chain

00007.router obtains local signature from nxtp contract, router allocates to address

00008.user obtains assets in another chain and signs

00009.router obtains the signed message and obtains the advance asset from the nxtp contract of the sender chain

running cost

Which of the three popular Trustless cross-chain bridges is better or worse?

The above fees are in USD

Note: The data in this table is the calculation when Ethereum is $2650, and the cost changes with the change of Ethereum gas cost. Due to different measurement times and network congestion, the results fluctuate greatly and are for reference only.

team

Arjun Bhuptani : Founder, Colgate University (Noble College of Arts and Sciences), co-Founder of Moloch dao.

Layne Haber : COO, UCLA, CEO of two startups.

Rahul Sethuram : CTO, UC Santa Cruz, former NASA research assistant, TESLA test engineer, Ethereum developer.

Investment and Financing

The total financing is 15.7 million US dollars, and the A round of financing has been completed.

Investors include: #Hashed, Ethereum foundation, Consensys, 1kx, OK ventures, huobi ventures, coinbase ventures, polychain, jinglan wang (optimism), Sandeep Nailwal (polygon)

  • Nomad

How it works

Drawing inspiration and experience from the Optimism team, Nomad itself is an implementation and extension of Optimistic Interchain Communication. The security guarantee of the system is that all fraud proofs can be issued by any participant, and that all participants have a window to react to any fraud.

Nomad forms the base layer of a cross-chain communication network, capable of sending general purpose messages with greater breadth, but with a 30-minute latency.

Which of the three popular Trustless cross-chain bridges is better or worse?

The home chain produces a series of messages (document), which are signed by the contracting notary (updater). If the notary presents a fake copy, it is punished and broadcast, and all clients know that it is malicious and can block access to their accounts.

Nomad is modeled on optimistic proofs, sending some data proofs that are accepted as valid after a timer has elapsed, while introducing challengers to submit fraud proofs.

Nomad spans multiple chains. The send chain is the source of messages, which are committed into a merkle tree (“message tree”). The root of this tree is notarized by the updater and relayed to the receiving chain by the relayer in “updates”. Updates are signed by the updater. They commit to the previous root and a new root. Any chain can maintain a “replica” contract with knowledge of the updater and the current root. Signed updates are held by replicas and accepted after a timeout.

This leaves open the possibility of the updater signing fraudulent updates. Unlike optimistic rollups, Nomad allows fraud, the most important change to the security model. Importantly, fraud can always be proven to the Home contract on the sending chain. Therefore, the updater must submit a collateral stake on the sending chain. Fraud can always be proven on the sending chain, and the security deposit can be reduced as a penalty.

cost

Which of the three popular Trustless cross-chain bridges is better or worse?

The above fees are in USD

Note: The data in this table is the calculation of Ethereum at $2540, and the cost varies with the change of Ethereum gas cost. Due to different measurement times and different network congestion, the results are subject to large fluctuations and are for reference only.

team

The Nomad team is unknown, but the founding team has over 4 years of experience working on interoperability.

Investment and Financing

The seed round of financing was $22.4 million, led by polychain capital, and the remaining investors included 27 such as the graph, celestia, amber group, mina, circle, avalanche, 1kx, polkadot, A&T capital, and coinbase.

Nomad integration with Connext

The advantage of Connext is that it enables cross-chain and L2 Trustless sending of value and calling contracts, but the disadvantage is that it does not allow fully general communication, but its latency is indeed much lower. Rely on Nomad high security, absorb Nomad’s trust/risk.

Leverage Connext’s low-latency liquidity pools, allowing end users to complete transfers in minutes, rather than delays of more than 30 minutes. According to an official Connext report, whales and institutions will take a longer 35 minutes to complete Nomad’s bridge time.

Connext and Nomad are a combination of low-latency liquidity + security. With the growth of Connext’s liquidity, the adoption of Nomad may gradually tend to institutional capital or large capital volume in the future.

  • Summarize

Which of the three popular Trustless cross-chain bridges is better or worse?

From the perspective of off-site popularity, the Hop bridge is still unbeatable at present, and the popularity caused by the integration of Connext and Nomad has led to a gradual increase in public attention.

Which of the three popular Trustless cross-chain bridges is better or worse?

On the whole, Nomad is more expensive to cheat on it due to its higher security. Nomad is an ideal protocol for more general cross-chain operations, which are usually performed by DAOs or other organizations, not end users, so the corresponding The usage and cross-chain time are not as convenient and fast; however, the integration with Connext can make up for some of the problems.

If we look back at the hacking incidents that have occurred in recent months:

Which of the three popular Trustless cross-chain bridges is better or worse?

At present, almost all of the biggest hacking attacks on blockchains come from cross-chain bridges, such as Ronin Network’s $624 million, Poly Network’s $611 million, and Wormhole’s $326 million… These attacks remind us that no matter what users think, Decentralization is a real security necessity for high-value applications.

We can see the high temptation and high cost-benefit ratio for cross-chain bridge attacks. For the cross-chain bridge to succeed, the first and foremost prerequisite is security. In the future, the assets of billions of dollars and tens of billions of dollars will not be able to be paid by any institution. **The ideal state for cross-chain bridges should be secure, interconnected, fast, capital efficient, low cost, and censorship resistant. With future technology iterations, native verification will prevail, but from the current economic and security perspectives The trade-off is that local authentication is a better solution in general.

Of course, the cross-chain bridge should not be limited to the cross-chain of assets. The invocation of messages and contracts, data interaction, and state interaction are all application directions of the cross-chain bridge. The rigid needs of diversified cross-chains create the future unlimited potential of the entire track.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/which-of-the-three-popular-trustless-cross-chain-bridges-is-better-or-worse/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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