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Beyond the Bridge: Interoperable Smart Contract Hubs Are the ‘Bouncing’ Blockchains of the Future  

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Beyond The Bridge: Interoperable Smart Contract Hubs Are The ‘Bouncing’ Blockchains Of The Future  
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Blockchain networks have long operated as silos (fragmented ecosystems) until the advent of bridging solutions. While a relatively new addition to the crypto market infrastructure, their value proposition in solving the interoperability problem is undeniable. 

In the earlier years, crypto users were limited to a single ecosystem; one could not send BTC to the Ethereum network or ETH to the Bitcoin blockchain. Today, such a transaction is possible through some of the existing bridging solutions, although not as straightforward. 

Diving deeper into the finer details, it is worth noting that Decentralized Finance (DeFi) and Non-fungible tokens (NFTs) have played a significant role in the adoption of cross-chain innovations. Over time, it has become increasingly important for users to be able to transfer assets from one smart contract platform to another. 

What better way to facilitate this communication than blockchain bridges? According to DeFi Llama, the leading bridge (WBTC on Ethereum) currently enjoys over $4.9 million in total value locked (TVL). 

Are the Existing Blockchain Bridges Foolproof? 

By nature, the crypto ecosystem is largely experimental, most projects are simply trying out new infrastructures to launch solutions that will attract more users. This normally comes at a cost; in the case of the blockchain bridges, Chainalysis recently estimated that over $2 billion has been lost in 2022 as a result of malicious attacks on cross-chain ecosystems. 

In one instance, hackers compromised the infamous Ronin bridge and got away with $625 million worth of digital assets. The big question then becomes whether crypto users can trust these platforms with their hard earned money? While it may not be black or white, one thing is certain – the existing blockchain bridges are not foolproof. 

Both trust-based and trustless blockchain bridges face a number of inherent challenges, but let’s differentiate the two before highlighting the shortcomings. The former type of bridge relies on third parties (custodians) for transaction verification; on the other hand, trustless bridges are purely based on algorithms and smart contracts. 

That said, here are three major hurdles that today’s blockchain bridges are facing in their role of bridging the interoperability gap. 

  1. Technical Liabilities  

Although touted as more reliable than centralized intermediaries, smart contracts are exposed to huge technical risks. The highest percentage of crypto hacks over the past two years were from the DeFi ecosystem. Similarly, trustless blockchain bridges are prone to security hacks – like was the case in the wormhole breach. This Ethereum to Solana cross-bridge was compromised in February 2022 after hackers discovered a bug in the smart contract, they ended up stealing over $326 million. 

  1. Single Point of Failure (SPOF) 

Centralization (SPOF) is another risk when it comes to trust-based blockchain bridges. In these ecosystems, users have to put their faith in third parties who run the cross-bridges such as Binance (manages the Binance bridge). However, previous instances like the Ronin $625 million hack exposed serious cracks in the trust-based model. Hackers were able to take control of five out of the nine validators, ultimately draining the funds as a ‘verified’ withdrawal. 

  1. Fragmented Infrastructures 

The fundamental role of blockchain bridges is to increase liquidity depth across the entire crypto market, but that has not always been the case. As it stands, most of the cross-chain solutions that have been launched are limited to certain ecosystems. This means that a user would have to go through two or more bridges in some cases before they can transfer funds to their desired blockchain networks. It beats the whole logic of interoperability, let alone creating deep markets for DeFi and NFT natives. 

A Long term Solution : Interoperable Smart Contract Hubs 

If there’s one admirable thing about the crypto industry, it is the rate at which innovators come up with new solutions. Pioneer blockchain bridges may not have met the expected standards but there is an emerging cross-chain trend; interoperable smart contract hubs. This nascent type of bridging solution introduces open-source registries where developers can share their code and access other smart contracts. 

One such bridging solution is t3rn, a smart contract hosting platform designed to offer an interoperable environment for blockchain developers. At the core, the t3rn registry allows developers to contribute smart contract codes to the open repository; these codes can be integrated by anyone through the t3rn plugin circuits and gateways. More importantly, developers also have an option to charge remuneration fees. 

Besides the interoperability solutions, upcoming smart contract hubs such as t3rn are going a notch higher in the security domain. This platform features a ‘fail safe’ mitigation approach whereby execution changes are escrowed, so they can be reversed if they fail. While such bridging innovations are yet to gain popularity, the composable nature of smart contract hubs will undoubtedly make it easier for developers to build standard and interoperable DApps.

Conclusion 

The blockchain ecosystem is now over a decade old, a lot has changed since Bitcoin’s launch in 2009. Most notably, there are several blockchain networks, some of which are solely focused on smart contract development while others like Bitcoin are largely transactional. That said, it has dawned to the industry stakeholders that we need an ecosystem that can operate under one umbrella. The advancement of bridging solutions will not only unify the digital asset market but eventually create an opportunity for integration with traditional finance. 

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CertiK Uncovers Suspicious $2.4M Payments Into Tornado Cash

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Certik Uncovers Suspicious $2.4M Payments Into Tornado Cash
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  • The money movement is linked to the October 2021 BXH Exchange breach.
  • GitHub reinstated the Tornado Cash code in “read-only” mode.

On Saturday, crypto security company CertiK said that it had uncovered a suspicious $2.4 million payment into the cryptocurrency mixer Tornado Cash. Information suggests the money movement is connected to the October 2021 BXH Exchange breach. It resulted in a loss of $139 million. Although the U.S. Treasury’s Office of Foreign Asset Control (OFAC) has placed sanctions on the crypto mixer. However, the exchange is still being used to move money.

The theft of over 4,000 ETH worth $139 million from the BXH Exchange at the end of October is likely connected to the transfer of funds.

Hackers Defying Sanctions

The address 0x158F5 is held by a third party and used the Binance Smart Chain and Avalanche staking contract’s privileged method to retrieve staked tokens and withdraw cash. The tokens were then transferred to Ethereum using the address.

CertiK reports that the staking contract holding the funds and locations was previously released by a Telegram group formed by persons affected by the BXH Exchange. Tokens with a bridging ERC-20 standard were converted to ETH at the address in question. To date, almost $2.4 million in value has been transferred into Tornado Cash, represented by 1865 ETH tokens.

Even after the Office of Foreign Asset Control at the U.S. Treasury banned suspicious transactions on Tornado Cash in August, the service is still accepting them. The crypto mixer platform has just received a transfer of 500 thousand DAI from EOA 0x0B789. The money transfer was associated with an exploit in DAO Maker.

After receiving confirmation from the Office of Foreign Asset Control of the United States Treasury, GitHub reinstated the Tornado Cash code in “read-only” mode.

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Whale Alert: 270 Million XRP ($130M) Bought by Whales

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Ripple (Xrp) Price Jumps To New Four-Month High
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  • The largest ever buy was on the Bitso crypto market for 54.1 million XRP.
  • XRP prices have increased by around 50% during the last week.

The native XRP token of Ripple has seen the most growth over the previous seven days. While Bitcoin and Ethereum have both had big price declines recently, XRP has seen a sharp increase. The current price increase of XRP may be attributed to a number of factors. Whales hoarding Ripple tokens is one instance.

Tokens worth around $130.2 million in XRP, almost 270M XRP have been transmitted from several cryptocurrency exchanges to many unknown addresses in the past 24 hours, according to data from Whale Alert. The largest ever buy was on the Bitso crypto market for 54.1 million XRP. Approximately $27.5 million worth of XRP coins were purchased by Whale all at once.

High Volatility Expected After Judgement

However, whales have been buying up XRP on the Bitstamp platform to the tune of nearly $84.1 million. To their XRP holdings, whales have just added more than $41.4 million over many trades. Meanwhile, a massive transaction involving 132 million XRP (about $62.1 million) was also spotted by the whale tracker.

Since the SEC and Ripple submitted their summary judgement papers, there has been a dramatic increase in the whale stockpiling of XRP tokens. The current increase was caused by new court documents. It also noted a surge in the number of active addresses holding between 1 and 10 million XRP tokens in late 2022.

On the other hand, XRP prices have increased by around 50% during the last week. Since word of the case’s resolution circulated favorably across the market, this is the result. At this moment, the price of XRP is $0.5015 as per CMC.

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California Governor Vetoes Crypto Regulation Bill

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Following Aftermath Of Recent Slump Bitpanda Announces Workforce Layoff
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