Multichain Hacked; Services Halted | ERC-7281: Sovereign Bridged Tokens | dYdX V4 Public Testnet & More!
Last Week In The Multi-Chain Ecosystem (03 - 09 July '23)
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!
Bridge Updates
1) Multichain Hacked; Service Halted ⚠️
Multichain addresses were drained for $126M, representing around 50% of the FTM bridge and 80% of the Moonriver bridge holdings.
These tokens are now distributed across 6 addresses. Circle has frozen Multichain exploiter's accounts with >60M USD on Ethereum.
Multichain has stopped all services, with no confirmed resume time. Please don’t use Multichain.
2) ERC-7281: Sovereign Bridged Tokens by Connext ✨
Connext introduces ERC-7281: Sovereign Bridged Tokens, an open standard to fix the systemic risks tokens face from bridges.
EIP-7281 (aka xERC20) proposes a minimal extension to ERC-20 to fix problems with token sovereignty, fungibility, and security across domains. Under this proposal, ownership of tokens is shifted away from bridges (canonical or 3rd party) into the hands of token issuers themselves.
3) Axelar and LayerZero Assets on Fantom Network 🔗
Axelar and LayerZero announced the introduction of $USDC, $USDT, $WETH, and $WBTC built on top of them, to the Fantom network, with the support of Fantom Foundation and key Fantom ecosystem projects.
4) Wormhole to Support Cosmos 🔜
Wormhole dropped a teaser hinting at expanding to Cosmos in the near future.
5) Gnosis Omnibridge Integrates Succinct’s Ethereum ZK Light Client 👏
Gnosis OmniBridge has integrated Succinct Lab’s Ethereum ZK Light Client. Users who bridge assets or data from Ethereum into Gnosis Chain will now have additional security from Succinct’s OmniBridge ZK Validator Smart Contract.
6) LI.FI Partnerships & Integrations 🔥
LI.FI announced several integrations in the past week, including:
Triangle, an all-in-one API for wallet infrastructure, has integrated LI.FI. With the integration, developers can leverage LI.FI’s API to offer wallets seamless cross-chain swaps out of the box.
Mozaic, zap straight into Mozaic Vaults from any chain with just 1-click.
SpaceSwap, a cross-chain bridge and DEX aggregator built on LI.FI.
Crossify, a cross-chain payment gateway that simplifies the complexities of crypto payments, has integrated LI.FI’s SDK. With the integration, businesses and individuals can send and receive crypto payments quickly and efficiently across 17 chains & layer-2 scaling solutions.
Velvet Capital, a cross-chain DeFi operating system that helps launch & manage on-chain funds & structured products, has integrated LI.FI’s Widget.
Multi-Chain Ecosystem Updates
The much-awaited public testnet of dYdX V4 is officially live. The public testnet currently supports Bitcoin and Ethereum markets, but it’s anticipated to include 30+ markets as the network upgrades.
2) Gnosis Chain to Introduce Gnosis Pay 🔜
Gnosis Chain plans to introduce Gnosis Pay, a decentralized payment network that operates as an L2 on top of Gnosis Chain. The initiative will boast a feeless environment through account abstraction and a non-custodial VISA card.
3) OpenSea Supports NFTs on Zora’s Network 🤝
Zora Network, an L2 built on the OP Stack, is now supported on OpenSea.
4) IDEX Partners w/ Polygon to Launch XCHAIN 💜
IDEX, a trading platform, announced its plans to create a Polygon Supernet called XCHAIN — a zkEVM Layer 2 dedicated to serving the IDEX ecosystem.
According to the team, this will allow IDEX “to achieve UX and cost parity with CEXs, but without sacrificing security.” The internal XCHAIN testnet is already live.
5) Axiom Mainnet Alpha Release 👏
Axiom, the first ZK coprocessor scaling data-rich applications on Ethereum, announced that its alpha release is now live on mainnet.
Axiom represents a new wave of applications that enable developers to expand the functionality of smart contracts by accessing verified onchain data and computing on Ethereum via zk proofs. Learn more.
What’s Popping?
Today’s “What’s Popping?” is a guest post from the team behind Across, one of the most used bridging protocols in the industry.
Across stands out as one of the premier bridging solutions in the cross-chain ecosystem, dominating various routes and token combinations via LI.FI. It is a low-cost and secure platform to move funds across the ecosystem.
As keen observers of Across’ tech and performance, we approached their team to write a post highlighting the impact of Optimism’s Bedrock upgrade on transfer time and security assumptions of bridges. The team provided intriguing data, and we are excited to share their insights with you. We hope you enjoy reading it as much as we did.
Keep in mind that the opinions expressed in this post are strictly their own and don't necessarily reflect the views of LI.FI.
— — —
Bridges’ Performance Post Bedrock: Insights from Across
The Optimism Bedrock upgrade went live on June 6th 2023. It is the latest major release of OP Mainnet, and it introduced a dilemma for cross-chain bridges.
This upgrade improved Optimism by lowering fees, decreasing deposit times, improving proof modularity, improving node performance, and increasing Optimism to Ethereum compatibility (to read more about the Bedrock upgrade, please see Optimism’s explainer on Bedrock).
However, one of the costs of these improvements is the introduction of reorganization or re-org risk on Optimism; a re-org is when certain blocks that have already been produced are changed later. The re-org risks come from the fact that, if Ethereum re-orgs, then that re-org can now be passed on to Optimism whereas previously Optimism waited for finality on Ethereum before receiving/sending information.
To account for this, Optimism Bedrock blocks are categorized in three different states:
Unsafe — can be re-orged if L1 re-orgs, or the sequencer reorg.
Safe — have been submitted to L1 but can still be re-orged if L1 re-orgs.
Finalized — cannot be re-orged.
Finalization on the origin chain side is particularly important for bridges because, if they fulfill a transaction that gets re-orged after the fact then it is possible that funds are lost – Depending on the bridge’s design, this can even result in the loss of LP funds. Prior to the Bedrock upgrade, bridges were able to treat Optimism blocks as “finalized” almost immediately after they appeared. This meant that sending a bridge transaction from Optimism could happen nearly instantaneously.
Following the upgrade, many bridges have reacted to this risk by waiting for stronger confirmation before sending funds (to avoid these potential losses of LP funds). Unfortunately, this means that the end user needs to wait longer to receive their transfers from Optimism.
In the chart above, we can see the increase in fill (transfer) times caused by the Bedrock upgrade, bridge by bridge. It shows that Hop Protocol’s average bridge transfer times went from ~2 minutes to ~20 minutes, Celer Network’s average from ~2 minutes to ~7 minutes, and Synapse’s average from ~30 seconds to ~20 minutes.
Across Protocol’s average bridge time remained below 5 minutes even after the upgrade. Across is able to support such fast bridge times without passing on these risks to their LPs by utilizing a decentralized network of relayers. These relayers each get to choose their own level of finality risk and, if they make an invalid fill, then it is their funds that are lost and not the LP funds. Relayers initially were cautious so Across saw a slight increase in bridge time, similar to other bridges, but, since that initial spike, Across’s times have come back down to pre-Bedrock bridge times. We believe that this design gives our users and LPs the best experience – Users receive by the fast transfers that they need while risk gets shifted away from LPs and onto active relayers who choose which risks they’re willing to accept.
We look forward to seeing future blockchain updates and determining how we, and other bridges, can best serve our users.
Additional Links:
Across on how Bedrock upgrade affected the cross-chain bridging landscape
Across on How bridges stack up against another on fill times
Interesting Reads
1) Bridging Databases (Part 2) — Patrick McCorry
2) The Significance of Storage Proofs — Herodotus
3) Atomicity Composability — Between different roll-ups sharing a sequencer
Get Started With LI.FI Today
For more information about the LI.FI protocol,
Head to our link portal at link3.to/lifi
Read our SDK’ quick start’ at docs.li.fi
Join the official Discord server
Follow our Telegram Newsletter
Subscribe on our Substack
or try our any-2-any swaps NOW at jumper.exchange