The downside of trustless blockchain bridges is that the increased complexity increases the attack vectors, as illustrated by two massive hacks in early 2022.
In February the Wormhole Bridge hack saw 120,000 Wrapped Ether (wETH) tokens, valued at $326million, stolen from the Solana side of a bridge to Ethereum.
The Wormhole incident was quickly eclipsed by the attack on the Ronin Bridge resulting in the loss of an estimated $625million of tokens at the end of March.
In both cases one side of the bridge was exposed through a technical vulnerability. This doesn’t just lead to the loss of assets held by the exposed end of the bridge but has significant knock-on effects.
When funds are bridged blockchain A holds the original funds and mints a synthetic version that is sent to blockchain B. If the funds held by blockchain A are then stolen, all blockchain B holds is a worthless IOU because there is no longer anything backing it. As those IOUs end up in liquidity pools elsewhere the effects ripple through the wider crypto ecosystem.
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