foreign
[Music]
obviously
and I'm gonna talk a little bit about
bridges you might have heard a lot of
talks about bridges this one might be
slightly different because
the subject of the talk is actually
quite serious I mean we had a lot of
problems with Bridges recently so
um before I actually go into the
um
the Crux of the matter let's let's just
go back uh
and look at a bit of a history so how
come I'm here two years ago more or less
we started to work at the uh
multi-train strategy for the maker Dao
and we ask ourselves a question how do
we actually move the eye to different
chains so um
it was actually quite
quite hard and
and for us
let me go back so two years ago we
started to work on the multi-train
strategy and we had to look at all the
other chains and we had to find out how
secure they are to actually be able to
move die in a very secure Manner and
to do that to look at the security of
all the other chains so
basically I created the spreadsheet and
I posted the spreadsheet on the Forum
and frankly after a while not a lot of
people looked at the data and looked at
what we had to say so
so I figured that we need to make this
information more broadly available to
the broader audience and we
basically created a website called L2
beats and the reason for us to actually
do that was to make people aware that
security of the eye on all the other
chains is very very different if you
hold the I on let's say polygon if you
hold die on Phantom you'll be looking at
a very very different die and the
security properties of the die will be
very different
for make it out
it is of the utmost importance the Dai
is censorship resistance and if you hold
the eye on all these other chains you
should really ask yourself a question is
this really a die that you hold on
ethereum does it have the same
Properties or is it actually different
right and can you make all these
different dyes fungible and what is what
is it really needed to be able to
maintain all these other chains so these
are actually quite hard questions and
that's why it took us so long to get all
of us to where we are here and
um
once we looked at all the other chains
we want to publish all the results and
this is how l2b was born ldp it was
essentially initially created as a
website to disclose all the risks for
all the different chains and
it took us really by surprise how
important this
thing was everyone was like really
looking at at the risks and the value
locked and at all the information that
we actually
uncovered in a way
so let's have a very quick look at the
state of the bridges and where we are
today
so essentially uh when we look back at
the last year it was about a year right
we had a hack at the poly Network we had
a hack at the chain swap we had a hack
at the uh any Swope so uh last year was
really very bad but that doesn't really
compare to what we witnessed this year
and it's really shaping up to be much
much worse
so it all started with the Wormhole hack
then we had a running Network
um it was like huge 600 million dollars
uh was taken from that bridge uh then we
had the harmony
um Nomad this one was particularly bad
uh I personally really liked Nomad
architecture I was actually trying to
convince my peers at maker to have a
very closer uh much closer look and
unfortunately to a bug in a smart
contract it was hacked uh literally two
weeks after I pitched uh Nomad so that
was that was really really uh intense
and and then probably a week before
Defcon you might have heard about
binance and I even had to correct my
presentation because of what happened
literally yesterday right it's not just
the bridge some other D5 protocols were
hacked as well but yet we had another
Bridge hack so bridges are scary and
bridges seem to be really a weak point
in all of this and we had to take a
closer look at all of them so far we've
spent the last two years looking mostly
at the Roll-Ups and now it was time for
our team to have a look at other Bridges
as well and
how we publish this information like I
said before we basically looked at all
the escrows we looked at all the values
that was locked in all the bridges
but looking at other not just the
Roll-Ups looking at other Bridges was
essentially requested by the community
and if Josh Stark from ethereum
Foundation asks you to actually do
something you should certainly consider
so
without the further Ado I mean this is
actually my pleasure to uh to announce
that at l2beat we also are covering all
the bridges uh you can check it out it's
actually up and running and live uh
since yesterday and I'm gonna tell you a
little bit how we look at these Bridges
and what are the funding findings that
we uh uncovered uh by by looking at
these Bridges
so
to put it simply we obviously track
total value locked in these Bridges so
we can see more or less the same type of
list as for layer twos
uh we tracked total value locked and uh
you can you can see how much value is at
stake uh this is all that value that
potentially can be hacked and the
bridges are like these uh huge pinatas
uh for uh for potential hackers right so
we really need to understand what are
the risks and what are the security
assumptions behind all these Bridges
and then you can look at the bridges to
roll ups uh as a type of a canonical
Bridge so you can combine this
information and and you can see the
total value logged in uh all of these
systems and all of these Bridges
uh but as you know uh l2b is primarily
about the uh the risks we want to
disclose the risks uh like you can see
on this particular example uh most of
you probably know that optimism does not
have fraud proofs uh right now deployed
and this information should be known and
available to everybody so you know when
you move your funds to optimism what are
the security assumptions I mean we are
in a close contact with Optimist team we
know that they're working on the fraud
proof system but as it stands right now
you have to trust them right you have to
trust the team and you have to trust the
sequencer
um so I guess we thought that you know
we need the proper uh risk framework for
Bridges uh that would work more or less
the same way as we did that before for
uh Roll-Ups we believe that risks should
be disclosed we believe that we should
make everybody aware of the underlying
security assumptions uh we should
constantly monitor infrastructure for
upgrades and we should really monitor
the uh the security uh parameters and
this is tough this is hard because some
of these constructs are actually quite
quite complex and you need proper
automation you need proper tooling you
actually need to be able to read from
Storage diffs which if you have ever
tried to do that it's not particularly
easy and thankfully right now there are
some tools that actually allow you to do
that much easier but generally what you
need to do is you need to replay all the
potential ethereum transactions that
change the particular slot so so that
stuff
but but this is our task and we believe
that once we do that we'll actually make
multi-train infrastructure more
transparent and secure while keeping
teams honest and it is all about honesty
right it is all about proper disclosures
it is all about making sure that users
do understand the risks so what are the
risks when you're actually using Bridges
and you would be surprised how a few
people actually do understand most
people kind of think that when funds are
in transit and once they arrive to the
destination they should be safe right so
it's almost like you know Crossing the
the bridge across the water and and once
you've made it to the other side you
know you're safe but you're not you're
definitely not safe and I will try to
explain why but before I do that you
know I will actually share with you uh
interesting findings that you might
actually also find surprising so so the
first one and I think it's actually
quite a big one uh is the uh the
multi-chain multi-chain is one of the
biggest Bridges with the biggest dvl
turns out that last year they actually
removed from escrow uh quite a lot of
funds like literally millions of dollars
so normally for that type of bridge you
expect that you put your funds into the
escrow and on the other side of the
bridge some funds will be minted right
and when you go back uh the funds from
the destination they will be burned and
the validators will release the funds
from the escrow turns out that you know
in this particular case validators
actually took funds out of the escrow
without actually burning them from
destination so that was odd and the the
amount was very significant
and it seems like no one cared like
people were not really aware that that
was happening and just the fact that it
is possible for the validators to take
funds out of the escrow uh this is the
risk assumption that you know you should
be all aware of right if you're using
the bridge that's externally validated
that's the thing you know they can all
take your funds so in this particular
instance apparently the funds were used
to provide liquidity uh to any tokens on
on a lot of different chains and to make
sure that this is exactly what happened
you would have to like go to all the
other chains and check it out but you
know my question to uh to the
multi-chain team is uh was this part of
the contract right uh worry users aware
and what is the consequence can actually
users withdraw all their funds and more
importantly uh what is this additional
trust assumption uh because it
validators can remove funds from the
escrow uh they can do all sorts of
things as well right and how do you
actually monitor uh what they're doing
so this one then you have something
called plasma Bridge uh some of you
again might be aware of because this is
uh one of the two Bridges uh that you
normally use to move tokens to polygon
and this particular one has a very
interesting documentation it says in the
documentation that it provides increased
security grantees because there's a
seven day withdrawal period and during
that period you can challenge uh
um validators from polygons so it's kind
of like a plasma
exit mechanism
however
the best of my knowledge uh this was
actually implemented and deployed on a
test net but it was never deployed in a
mainnet right so if you look at the
mainnet code and by the way who's
looking at the main code of the bridge
you know the contract probably very very
few of you
you'll see that the method that allows
you to actually challenge the validate
this is empty right you can't do that so
frankly the plasma bridge right now
has the same security assumptions as the
POS Bridge the main bridge that you
normally use the polygon and it's got
this user nuisance of seven day
withdrawal period
and the last one that I wanted to
mention uh which in the documentation uh
the risks were properly disclosed but
again I think that the user should be
aware of that if you use the Omni bridge
to move your funds to the X di chain
they might invest some of these funds
they might actually put the funds that
you normally expect to be in the escrow
into other into compound or whatever
they like actually right so normally
it's called
re-hypothetication This is the practice
where you know banks are using your
funds to actually invest them and you're
running into liquidity risk potentially
if you were to withdraw all the funds it
uh they may not be available they might
be like locked somewhere in in sayava or
whatnot right so the whole process is
very transparent but the power of value
data is to actually do that may be
surprising to some of you because again
is a question uh what are the security
assumptions right and what do you
normally expect when you put the funds
into the bridge
so
uh so now with all these examples you
may wonder you know how do you actually
collate all this information and how do
you actually make it available to the
users and this is a challenge we've got
hundreds of bridges we've got hundreds
of different destinations we've got
hundreds of tokens and every single
transfer may be actually different right
and this is a challenge for us as well
because we really wanted to make it very
transparent to everybody and we wanted
to make sure that users are actually
aware
what exactly is happening behind the
scenes so so we try to kind of you know
make it the whole framework user
friendly and I will quickly uh summarize
what you will be seeing uh on the L2
beat Bridges section so first of all we
kind of differentiate
primarily to different Bridge types
and the first one is a token bridge and
that's the bridge that means tokens on
the destination and then so this is
something that you know normally you
should be like
intuitively expecting right you put
tokens into the escrow the Bridgeman's
tokens on the destination however
a lot of bridges cannot mince tokens
right like take die as an example I mean
most bridges won't have uh access to
diamonding facilities so they have to do
something different uh they have to on
the destination they have to create a
liquidity pool they have to Mint
something or maybe you know through some
other mechanism and they will like swap
whether they minted for the die that is
like sitting and waiting for you on the
destination and we call these types of
bridges liquidity Networks
and I think what is the most confusing
for end users is that if you go to a UI
of almost any Bridge you will not know
if you're actually using token Bridge or
a liquidity Network in fact uh some of
the bridges are hybrid sometimes for
some tokens they may actually mint you
tokens sometimes they may use uh
liquidity poles and it like I see the
case for the multi-chain you can have
like some mixed results some of the
tokens may be minted for you and some of
the tokens may be actually uh coming
from the liquidity Pawn so these types
of bridges we will call a hybrid and
again if you compare token Bridges to
liquidity networks they have a very
different risk profiles
um so for the end users I think it's
very useful to actually understand uh
the difference between the two right you
have unlimited liquidity for the token
Bridge uh you have tokens uh
that if you keep the token at the
destination you will face the risk of
the validators of that bridge and
generally token Bridges can be quite
slow and expensive while the liquidity
network is almost like the opposite
right it has a limited liquidity
typically so you might end up with your
tokens being stuck
uh but tokens held on the destination
are not at risk of this network they're
actually at risk of the token bridge
that was used initially to move tokens
to the liquidity pool so again this is
the risk that's actually quite difficult
to uh disclose and finally they can be
fast and they can be cheap right so
so this is the uh the column on the L2
beat which you can check very quickly
and and this is something that should be
essentially easy to read for all of you
and if you use any particular type of a
bridge you know I do encourage you to
check it out and and and and and
understand the consequences
more importantly from the risk
perspective and this is like maybe a
little bit more technical uh is the
question how the messages are actually
relayed between the source chain and the
destination chain so technically we use
all sorts of uh terms for this like
arbitrary messaging Bridge or some other
terminology but because we wanted to
make the framework sort of user friendly
we just want you to understand what are
the four in our opinion primary
mechanisms that are actually used to
relate the messages and again these
messages are important because when you
lock your token at the source the
destination somehow has to be informed
how do you mean the token of the
destination right so what are the four
different categories well first of all
you've got the third party meaning that
you have to trust someone to relay this
message and that particular party can
essentially break you right so you you
put full Trust on that party then you've
got what we call the optimistic scheme
we relay the message we trust that the
message is correct unless someone
actually proves that the message is
incorrect so your intuition should be
like who's watching uh the relayers
right who are the Watchers and what is
the length of the uh of the fraud proof
window because optimistic uh
message Bridges they always have
watchers and they always have the uh
fruit fraud proof window
then we've got bridges that we normally
call as secured by light clients and
essentially what it means is that we
trust the destination chain to tell us
what happened right so when let's say
polygon validators say that something
happened on polygon I don't check that
this is exactly what happens I just
trust the polygon validate this and on
ethereum I just need to build a software
that will check the signatures
essentially right so you're putting your
trust on the validators on the
destination chain and the more secure
bridges in our opinion are the trusted
bridges that use ethereum as the
ultimate source of Truth so we don't
trust anybody we build smart contracts
on ethereum that will validate if the
destination chain is not lying to us
obviously there are two techniques right
now you can use ZK proofs or you can use
uh fraud proofs that's why we've got
zika Roll-Ups and optimistic rollups and
if implemented correctly these are by
far the most secure Bridges
provided that there are no bugs in the
implementation right
so uh what can go wrong I mean you
forgot the external validators
everything can go wrong right they've
got full access to the escrow they can
mint whatever they want to Mint if
there's a bug you know you can have
billions of tokens minted out of thin
air and validated this can censor they
can steal they can freeze funds they can
do whatever right you have to fully
trust validate this for optimistic
validation
as I said before you need to make sure
that Watchers are actually active
because if no one's watching uh the
fraudulent message can be relayed for
the light client validation uh if you're
transferring your tokens to a chain
that's weak that has very I don't know
it's a low value chain and
vital this can be potentially 51
attacked then your tokens again can be
stolen from escrow so you have to really
understand how strong is the chain and
that you're moving your tokens to and
finally for roll-ups for a full client
ethereum validation in theory nothing
can go wrong right so funds cannot be
censored funds cannot be stolen as long
as there are no bugs in the
implementation and this is the uh how we
actually show uh who is validating all
these Bridges and I think this is the
most important column that you should
all Focus if you want to understand uh
how a particular Bridge operates
then we have the upgradability uh so so
this is essentially the information
whether the bridge can be upgraded and
who have got the upgrade power and again
we kind of have to assume that whoever's
got this power is honest so this is a
very important security assumption if
you can upgrade the bridge you can steal
all the funds that's as simple as that
and finally and I think this is the most
interesting aspect which is often
overlooked is who's got the minting
power on the destination right so take
again die as an example uh if you move
uh die via three different Bridges uh
let's say use the uh make a dial bridge
and move your die to arbitrum Optimus
start net your diary will be essentially
minted by make a dial contracts right
and it will have exactly the same
properties as your die on the mainnet
but if you move dive through the polygon
bridge then your die on polygon will be
minted by polygon validators and they
might actually have the upgrade power of
the die and finally if you move Dai on
Phantom it will be minted by multi-chain
multi-seek right so again it's a
question to you I mean how secure you
feel with your die in your wallet
uh so this is the last column uh that we
show on our framework
and as I said before uh I guess you know
the the the end game for all of us
should be to build trustless Bridges
um because everything else uh we need to
put our trust on some uh some other
parties and these bridges are very very
hard to build
we had some problems with arbitrine
Bridge uh there was a bug it was
essentially uh fortunately uh uh
uncovered and the bridge wasn't hacked
but uh
but as you can see you know uh the
roll-up Bridges can be buggy uh same
situation happened in optimism
um and this is one of the reasons why uh
these bridges are right now not fully
yet permissionless and I hope they will
be uh very very soon but even more
importantly as you can see from this
transaction uh that's actually moving uh
how much is it this is actually seven uh
over 700 000 ether from one version of
the bridge to another version of a
bridge and that power has a arbitrary
multi-sig right so even though you may
think that arbitrine has fraud proofs
and whatnot uh they still have a
multi-stick that can move all the funds
from the bridge and they did in this
very transaction and it doesn't really
raise any alarm so that was kind of uh
interesting
um we uh we saw this transaction and you
know we analyzed this transaction it was
an upgrade and everyone knew that which
one uh was about to upgrade but seeing
such a transaction moving essentially
building some funds in one one move you
know it's it's kind of scary
so to sum up
we kind of think that we have no choice
we have to put engineering effort into
uh building those roller Bridges I don't
think it makes a lot of sense uh moving
forward to rely on on third parties uh
in the long term in the short term they
might be quite useful because we need
that functionality but in the long term
eventually we need to find a way to
actually make sure that the code behind
all these Roll-Ups is actually secure
and as I said before I mean the code is
very very complex right these bridges
are actually very hard to analyze
I guess for a while none of these
Roll-Ups have shed the training wheels
so
so you should really also understand
what are the current assumptions uh but
every single team that we talk to they
have promised us that eventually these
training wheels uh will be shed so
there's there's some hope for the future
but how do we make sure that such
complex software is bug free and how to
make sure that these roll ups will not
be hacked in uh ensuing months and I
think this is probably one of the
hardest questions from the engineering
perspective and
from the perspective of the whole
Community
we don't seem to have a solution for
dealing with uh discovery of potentially
critical bugs without actually relying
on some honors actor right if the bug is
found we all want some good guys to shut
down the bridge fix the bug and restart
the bridge without the bug that's quite
obvious right no one wants really the
bridge to be to be drained by uh by
malicious actor however
right now it just seems that the best we
can do is to sort of create a multi-sig
of some trusted uh security Engineers I
guess or a security Council of sorts and
these guys can perform these sudden
upgrades and
to make it permissionless and to make it
immutable that also means that we are
exposed to uh potential problems so
uh so thank you so much uh for listening
and I I do hope that you know the future
is bright and and hack free
[Applause]