cBridge DNS Hijack | LI.FI x Fractal | Bridge Support for Arbitrum Nova and Dogechain | Is Aurora an L2? & More!
Last Week In The Multi-Chain Ecosystem (15th to 21st Aug 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:
1) cBridge DNS Hijack ❌
A DNS cache poisoning attack was conducted on cBridge’s fronted UI on 17th August. The attackers hijacked the frontend and drained users’ funds by redirecting them to approve malicious contracts. 98% loss has been recovered, and all the users who revoked phishing contract approvals have been compensated.
Multichain and Connext have added support for Arbitrum Nova, a newly launched gaming-focused chain. Users can now bridge assets to/from Nova directly from other chains.
Fractal is now using LI.FI as a money lego to power cross-chain yield farming. With LI.FI’s tech stack, Fractal Protocol can determine the most efficient path from Ethereum to every chain it has a strategy deployed to. This significantly improves Fractal’s user experience as with LI.FI, Fractal transforms cross-chain yield generation into a one-deposit, one-click interface.
Synapse and Multichain users can seamlessly bridge between Dogechain and other chains supported by them. Synapse users will receive a DOGE gas drop post bridging to cover their first few transactions. Here’s a guide on how to bridge to Dogechain.
Coinbase Wallet has added support for Polygon bridging, enabling users to move assets between Ethereum and Polygon within the browser extension’s interface. The team plans to add bridging to Coinbase Wallet's mobile app and support for other networks soon.
The Nomad team published a “Road to Recovery” article that highlights their path forward towards relaunching the bridge. The team believes the road to recovery needs to be achieved in three phases: funds recovery, bridge upgrades and bridge restart/recovered funds distribution.
Multi-Chain Ecosystem Updates
Jump Crypto plans to upgrade Solana by creating a second validator client for the blockchain. The goal is to boost the network's throughput, decentralization, and reliability as it scales.
2) Acala to Burn aUSD 🔥
After an exploit that caused aUSD to depeg, the Acala community has passed a proposal to burn $1.28B of erroneously minted aUSD. The vote seeks to help resolve the error mint and reclaim the aUSD peg.
HUSD, the stablecoin issued by Huobi exchange, depegged on Thursday, 18th Aug. HUSD fell as low as $0.88, causing its liquidity pools on Curve to become unbalanced. The HUSD team explained that the depeg was caused as they closed market maker accounts in some regions to comply with regulations. The HUSD peg has now been restored.
Uniswap has completed the first phase of governance discussions and consensus check to activate its “fee switch.” The protocol plans to add a 10% fee switch on the DAI-ETH-0.05%, ETH-USDT-0.3%, and USDC-ETH-1% pairs.
5) Lido on L2s 🌴
Lido proposes to launch support for stETH (as wrapped stETH) on L2s, including Arbitrum and Optimism. Lido aims to enable users to stake ETH help on L2s directly from that L2 without the need to bridge their assets back to Ethereum Mainnet.
Maker has deployed a canonical DAI bridge between Arbitrum Nova and Ethereum. This will allow users to use Canonical DAI from the beginning, without any token migration.
What’s Popping on Twitter?
Alex Shevchenko, the CEO of Aurora Labs, posted a thread that discusses whether Aurora is an L2. Let’s break it down!
What is an L2?
The general consensus is that an L2 is a network that inherits its security from Ethereum. To break an L2, one would need to break Ethereum itself. Common examples of L2s are rollups like Arbitrum and Optimism.
By this definition, Aurora is not an L2 on Ethereum. Aurora runs as a smart contract on NEAR and inherits its security. To break Aurora, one would need to break NEAR and not Ethereum.
However, Alex argues that because of the Rainbow bridge and how it works, Aurora would classify as an L2. Here’s why:
Rainbow bridge is a trustless bridge that uses light clients in its architecture — To pass messages from one chain to another, Rainbow bridge deploys light clients of the source chain (NEAR) as a smart contract on the target chain (Ethereum).
According to Alex, this design makes NEAR (source chain) an L2 of Ethereum (target chain) because if NEAR is compromised, one would need to comprise the light client on Ethereum to be able to steal funds.
Thus, through Rainbow bridge, Aurora inherits Ethereum’s security and should be considered an L2.
Further in the thread, Alex says that if Aurora was added to the list L2s on l2beat, then the list would look something like this 👇🏻
It does not end here; Alex concludes that since the Ethereum light client is a contract on the NEAR blockchain, Ethereum is an L2 to NEAR.
The Jury is still out on whether Alex’s argument holds.
Researchers like Toghrul Maharramov (Senior Researcher @Scroll_ZKP) pointed out that since Aurora does not inherit data availability, censorship resistance, ordering and state transition correctness guarantees from Ethereum, it should not be considered an L2.
Do you think Aurora is an L2? Comment and let us know your opinion!
1) IBC and XCMP: Enabling Interoperability in the Inter-chain World
2) Fundamental Insights: An Overview of Mainstream Cross-chain DeFi Exchanges
3) How Fractal Offers an Omni-Chain Yield Generation Experience with LI.FI
4) Building towards a Secure Cross-Chain Future
5) The Ugly Truth About Crypto Bridges
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