Blockchain bridges… are showing cracks. Crypto bridges let people move coins between different blockchains (think: bitcoin to ethereum) and are a crucial pillar of decentralized finance (DeFi). On Thursday hackers got their hands on $570M in crypto by exploiting a cross-chain bridge between the Binance-affiliated BNB Beacon Chain and BNB Smart Chain.
A crypto cure… worse than the DeFi disease. Binance tried to calm hack-weary investors with a statement saying that a majority of the illicit coins had been frozen — hackers did successfully move $100M out of the Binance ecosystem (still nothing to sneeze at). Good news, though, right? Maybe not. The centralized devil is in the details:
- Hotchain: Blockchains brag about being decentralized and censorship-resistant. It's a big selling point.
- Lockchain: To thwart last week's hackers, 19 of BNB Smart Chain's 26 validators agreed to pause the entire chain, a rare move that temporarily prevented withdrawals and deposits.
- Notchain: Freezing solved one problem (think: hackers making off with the full $570M), but it raised another: is a chain truly decentralized if a small group of people can suspend it?
Bridges are crypto’s Achilles’ heel… Crypto-bridge hackers have snatched over $2B, including $625M from Ronin and $325M from Wormhole earlier this year. But it's not just $$ at stake: hacked cross-chain bridges show that vital DeFi infrastructure remains vulnerable to thieves. And if a fix isn't found, fears of even larger losses could lead to increasingly drastic responses, which threaten to undermine crypto's core premise: decentralization.