Binance Bridge Hacked for $586M | DODO Integrates LI.FI's SDK | deBridge Reimagines Bridge Design with deSwap & More!

Last Week In The Multi-Chain Ecosystem (3rd to 9th Oct 2022)

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Oct 10, 2022

Welcome to LI.FI’s Cross Chain Insider newsletter. If you want to join this community of cross-chain aficionados learning about bridges, interoperability, and the multi-chain ecosystem, subscribe below:

You can also check out LI.FI’s research articles, and follow us on Twitter!

Note: This week’s Cross-Chain Insider is a special IRL edition, as Kram and Arjun are working together in India. You can find the Proof of Work here.

Bridge Updates

1) Binance Bridge Exploited ❌

The BSC Token Hub, BNB Chain’s cross-chain bridge, was exploited on October 6, with hackers draining 2M BNB tokens or $586 million. Binance halted the Binance Smart Chain and managed to freeze $7 million in funds after pushing an update that froze the accounts.

Learn more about the hack:

2) DODO Integrates LI.FI’s SDK 🦎

DODO, one of the biggest and most innovative DEXs, has partnered with LI.FI to go cross-chain. They have integrated LI.FI’s SDK to enable in-dApp bridge and swap functionality across all 7 chains supported on their platform. Try bridging and swapping on DODO here.

3) deBridge Introduces deSwap Liquidity Network 💪🏻

deBridge has launched deSwap Liquidity Network (DLN), a cross-chain protocol built on top of deBridge that enables secure, limitless liquidity transfers across chains with zero locked liquidity. DLN offers a new bridge design that doesn’t require capital to be locked and enables swaps via “Networking”, i.e., order matching between users and LPs.

4) Synapse is Coming to Canto 💪🏻

The “Canto deployment proposal” has been passed, and Synapse is set to launch on Canto. Synapse will enable seamless asset bridging between Canto and various supported EVM chains. Users will be able to swap stables into NOTE, the native stablecoin within the Canto ecosystem, to use across dApps on Canto.

Multi-Chain Ecosystem Updates

1) Shopping.io Integrates Polygon 💜

Shopping.io, a crypto-friendly e-commerce service provider, has partnered with Polygon to allow users to shop on platforms like Amazon, Walmart, and Home Depot with MATIC.

2) Fantom to Lower Validator/Staking Rewards 🧐

The Fantom community has passed the proposal to lower validator/staking rewards. The changes in rewards have been made to 1) reduce the emission rate, 2) prepare Fantom for the next stage of growth 3) formalize a post-emissions structure.

3) Lido is Now on L2s 🌴

Lido is now live on Arbitrum and Optimism. Users can now bridge their staked ETH to Layer 2 protocols at the click of a button to benefit from lower gas fees.

4) Aztec Introduces Noir 👏🏻

Aztec has introduced Noir, the language of zero-knowledge proofs. Noir is a Rust-based domain-specific language (DSL) for creating and verifying zero-knowledge proofs. It enables devs to write zk applications compatible with any proving system.

What’s Popping on Twitter?

Hack We Go Again (BNB Edition)

The native cross-chain bridge between BNB Chain and BNB Smart Chain, the BSC Token Hub, suffered a $586 million exploit on Friday – the third largest in the history of DeFi.

The attacker stole 2 million BNB tokens in two transactions and escaped with roughly $110 million in value spread across Ethereum, Fantom, and other EVM-compatible chains.

@bkiepuszewski described the relationship between BNB Chain and BNB Smart Chain as “similar to IBC, or Rainbow Bridge (i.e. LIght Client)”, as the relationship does not require any external validators. However, according to anon security expert @samczsun, the hacker was able to exploit a low-level bug in the bridge by forging a proof at block 110217401 on the Native Token Hub to mint 2 million tokens out of thin air. From there, as tracked @bkiepuszewski, “that extra $BNB (on BSC side) was quickly converted to various tokens and moved out from BSC Chain via @StargateFinance liquidity network.”

In the wake of the hack, BNB Smart Chain was temporarily paused due to “irregular activity” on the chain. During the pause, roughly $400 million in BNB tokens that the hacker had yet to move off the chain were frozen. The BNB Chain team later characterized the decisions as “decentralized”:

“Decentralized chains are not designed to be stopped, but by contacting community validators one by one, we were able to stop the incident from spreading. It was not that easy as BNB Smart Chain has 26 active validators at present and 44 in total in different time zones. This delayed closure, but we were able to minimize the loss.”

According to the BNB Smart Chain team, on-chain governance will decide whether or not the BNB tokens stay frozen. Additionally, on-chain governance could choose to…

implement the BNB Auto-Burn to cover the remaining hacked funds
create a $1 million Whitehat program
found a bounty-catching program

With the BSC Token Hub attack, five of the six largest hacks in DeFi history are related to bridging – with the total amount of funds lost amounting to over $2 billion.

~Kram