DEX Portal’s multichain future without wrapped tokens

According to Vitalik Buterin, most cross-chain bridges are highly vulnerable in 51% of attacks. Locking and wrapping funds onto other chains is neither trustless nor decentralized.

Portal, a true cross-chain DEX based on Bitcoin (BTC/USD), believes there will be no place for wrapped tokens or third-party custody of assets in the future. Users’ assets should only be locked during trade execution.

The biggest hacks in history were due to cross-chain vulnerabilities

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THORChain, MultiChain, pNetwork, Wormhole, and Poly Network are just some of the cross-chain protocols that have suffered security breaches recently. Poly Network suffered the biggest DeFi hack ever worth $600 million. Wormhole lost 120,000 Ether (ETH/USD) worth over $321 million.

Portal’s executive chairman Chandra Duggirala said:

Bridges are hard to reason about and secure. Wrapping assets on other chains basically inherits the guarantees of an IOU. When hundreds of millions and billions of dollars are being secured by poorly engineered systems and custodians with untested security practices, it becomes hard to secure user funds. Given that hackers and attackers basically go scot free due to the “code is law” nature of public blockchains, security is especially important. We like simplicity and trusting proven, lasting contract types and transaction models like Bitcoin’s versus all sorts of experimental approaches to real user money.

Neil Player, head of crypto security company Staghead Crypto, added:

Cross chain bridges present a unique set of security risks and these types of exploits are not a surprise. It is a reminder how bleeding edge a lot of the applications that run on top of blockchains are. Exploits such as what occurred on Wormhole are expected to cause growing pains as the technology and techniques associated with bridging assets matures.

Risks with cross-chain solutions

Cross-chain solutions have more attack vectors because of the larger network surface area. In addition, most cross-chain bridges are too centralized.

Johnny Dilley, the inventor of Liquid Federation (Blockstream), noted:

Thefts from platforms like Moonbeam underscore the difficulty associated with safe and secure means of transfer between chain environments without an attitude of constant vigilance. Users without the capacity to evaluate the reliability of the systems they use will continue to be robbed blind. The industry needs a smarter, more permanent answer for cross-chain asset movement, and Portal represents the best step forward on that path.