• Blockchain bridges enable decentralized finance (DeFi) users to use the same tokens across multiple blockchains.
• Recent hacks of cross-chain bridges have caused security concerns for DeFi users.
• Trustless bridges, or noncustodial decentralized bridges, could improve user security of cross-chain transfers.
Overview of Cross-Chain Bridges
Blockchain bridges allow decentralized finance (DeFi) users to use the same tokens across multiple blockchains. For example, a trader can use USD Coin $1.00 USD Coin -0.01% MARKET CAP$41.96bVOL. 24H$8.91m USDC $8.91m on Ethereum or Solana to interact with DApps on those networks and move assets from one network to another using smart contracts on both blockchains.
Recent Security Concerns
Recent cross-chain bridge hacks have caused security concerns for DeFi users, with attackers stealing over $321 million worth of wrapped Ethereum (wETH), the largest hack in DeFi history at the time, followed by a further attack resulting in over $620 million stolen on March 23, 2022 and then again over $190 million stolen on August 2nd from the Nomad bridge in total amounting to over $2.5 billion stolen from 2020-2022 alone.
Trustless bridges are known as noncustodial or decentralized bridges and they could potentially improve user security of cross-chain transfers by allowing cross-chain transfers without needing a centralized custodian which would make it a safer option for interoperability between blockchain networks.
How Do Trustless Bridges Work?
These protocols work through a combination of software and cryptography that allows transactions to occur without requiring any trust between participating parties as all data is cryptographically signed making it secure against malicious actors trying to exploit these protocols for their own gain as there is no central point of failure available for them to do so successfully..
Trustless bridges offer an improved level of security when transferring assets between different blockchain networks compared to traditional trusted bridges that rely on centralized custodians and are therefore vulnerable to exploitation by malicious actors seeking access to user funds stored within these platforms. In conclusion, trustless bridges offer users increased safety when transferring assets between different blockchains which makes them an attractive alternative for many DeFi applications looking for more secure methods of operations