Jack Kubinec

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 <ul>
 <li>The chain is a layer-2 optimistic rollup that financially rewards “guards” for verifying transactions</li>
 <li>“Rather than deploy your dapp on ten different chains, why not deploy it on the bridge protocol that’s already connected to every chain?” Synapse tweeted</li>
 </ul>
 
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Crypto builders are rushing to <a href="https://cms.blockworks.co/bridge-protocols-race-to-win-consumer-trust/" target="_blank" rel="noreferrer noopener">restore trust in bridges</a> as cross-chain hacks have cost crypto users nearly $2 billion this year. But the Synapse Protocol hopes to win over disaffected investors by getting rid of bridging altogether.



Synapse Chain, announced today, would create a single-chain solution to cross-chain swaps. In theory, the chain could lower costs and increase security.



At a basic level, cross-chain bridges are protocols that transfer information between blockchains. The most common bridge use case is moving cryptoassets between chains. In that case, the bridge holds a user&#8217;s assets in a smart contract while deploying a “wrapped” IOU asset on the bridged chain.



Synapse Chain would do away with asset wrapping by creating a blockchain directly compatible with different cryptoassets, Synapse explained <a href="https://synapse.mirror.xyz/L6dBb7aXIJ1Ll5_sxP2bIJxVEYNd43ZzIV6dRylQJxw" target="_blank" rel="noreferrer noopener">in a blog post</a>.



For instance, if a user purchased hypothetical token XYZ on the Ethereum network, she could potentially use a Synapse-powered decentralized exchange (DEX) to directly convert ETH to XYZ without bridging tokens, saving on gas fees and increasing security.



Synapse’s “single execution environment” is built on Ethereum but theoretically is compatible with any blockchain.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">3/ By leveraging Synapse’s messaging system and bridge, Synapse Chain will become the organizational hub of all cross-chain activity. Rather than deploy your dapp on ten different chains, why not deploy it on the bridge protocol that’s already connected to every chain? <a href="https://t.co/XqZrLE8mSM">pic.twitter.com/XqZrLE8mSM</a>&mdash; Synapse Protocol (@SynapseProtocol) <a href="https://twitter.com/SynapseProtocol/status/1552665932027334657?ref_src=twsrc%5Etfw">July 28, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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The layer-2 uses optimistic proofs, where all transactions are assumed to be valid pending fraud claims from so-called guards.&nbsp;



Synapse believes optimistic verification will help the chain avoid adding to the nearly $2 billion in assets stolen from cross-chain protocols this year. Many hacked bridges held assets in multi-signature wallets that went light on the “multi.” <a href="https://cms.blockworks.co/defi-cross-chain-horizon-bridge-hacked-for-100m/" target="_blank" rel="noreferrer noopener">The Harmony Horizon bridge</a>, for instance, had five keys, only two of which needed to be compromised by the hacker.



An optimistic system requires every validator to approve transactions, as every guard tacitly verifies data when it does not submit an allegation of fraud. Synapse incentivizes guards to do their jobs by confiscating their SYN governance tokens when faulty transactions are marked valid, a mechanism known as slashing.



SYN jumped roughly 40% after the Synapse Chain announcement, trading around $1.70 Thursday afternoon.



Synapse’s optimistic rollup sequencer will initially be run in-house, though the protocol hopes to follow other layer-2s toward decentralization.



Still, <a href="https://vitalik.ca/general/2021/01/05/rollup.html" target="_blank" rel="noreferrer noopener">optimistic rollups have been criticized</a> for the tradeoffs inherent to the use of fraud proofs, such as a relatively long withdrawal period to move funds to the Ethereum mainnet, and Synapse is not the only team rethinking bridges. 



Axelar and LayerZero are other major players in the post-bridge space. In a Telegram message, LayerZero CEO Bryan Pellegrino called the protocol “neither a bridge nor a blockchain” that moves assets directly between contracts.



Similarly, the Synapse Chain, which is expected to go live on a public testnet within weeks, doesn’t necessarily require assets to be bridged at all.



“A lot of the assets won’t have to be sent into the rollup, they can live on a chain and the messaging system will attest to their value,” said Synapse’s chief operating officer Max Bronstein.



“If you trust the security of the messaging system, [then] you trust that the asset in the rollup is the same as the asset on the native chain.”



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Synapse Chain Eyeing Bridgeless Asset Swaps

<div id="highlights-block_62bc42c09b064" class="highlights">
 <ul>
 <li>Few DeFi companies employ dedicated security personnel</li>
 <li>Industry experts believe bridges will become more secure as DeFi matures</li>
 </ul>
 
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As investment in cryptocurrency grows, so does the incentive for criminal actors to exploit the DeFi (decentralized finance) space. Cross-chain bridge hacks have been the weapon of choice for crypto thieves in 2022. Bridge hacks have accounted for more than a billion dollars in stolen funds this year, according to research from blockchain analytics and compliance firm Elliptic.



Cross-chain bridges allow assets to be moved between different blockchain protocols, meaning the networks contain a large concentration of crypto assets. The recent string of bridge attacks has caused some industry leaders to question whether the benefits of bridges outweigh their risks. A top analyst at Elliptic believes bridge hacks are just growing pains that DeFi will eventually surmount.



<a href="https://cms.blockworks.co/defi-cross-chain-horizon-bridge-hacked-for-100m/" target="_blank" rel="noreferrer noopener">Harmony</a>, <a href="https://cms.blockworks.co/sky-mavis-ronin-network-bridge-exploited-for-over-600m/" target="_blank" rel="noreferrer noopener">Sky Mavis</a>, and <a href="https://cms.blockworks.co/in-second-largest-defi-hack-ever-blockchain-bridge-loses-320m-ether/" target="_blank" rel="noreferrer noopener">Wormhole</a> all suffered blockchain exploits exceeding $100 million this year. Mudit Gupta, Chief Information Security Officer at Polygon, believes bridge insecurity is an industry-wide problem.



“Most of the hacks are happening due to companies not having proper security experts and not knowing what to do themselves,” Gupta said in a Twitter DM. “There are very few DeFi companies with [dedicated] security personnel.”



DeFi protocols have proliferated rapidly in the past six years, but security infrastructure has not kept up with the now over-$900 billion industry. For this reason, hacks totaling in the hundreds of millions are not surprising.&nbsp;



On April 1, a trader tweeted their concern that a major Harmony Horizon Bridge exploit would only require a hacker to obtain two of the protocol’s five validator keys. In June, that exact scenario occurred — and Harmony was ransacked for $100 million.



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<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Since the current narative du-jour is bridges &amp; bridge hacks, I wanted to do some digging on the harmony bridge on Ethereum which secures ~$330m worth of tokens.&mdash; Ape Dev (@_apedev) <a href="https://twitter.com/_apedev/status/1510007663832223751?ref_src=twsrc%5Etfw">April 1, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Vitalik Buterin, co-founder of Ethereum, believes cross-chain bridges are inherently prone to security breaches.



“The fundamental security limits of bridges are actually a key reason why…I am pessimistic about cross-chain applications,” Buterin wrote in a lengthy January Reddit post. The influential founder went on to express his belief that assets should be held in the same blockchain ecosystem, rather than shuffled between chains.



Tara Annison, Head of Technical Crypto Advisory at the crypto research firm Elliptic, disagrees.



“We’re not going to live in a single chain world,” Annison said. It will always be necessary to move assets between blockchains, so “we shouldn’t characterize bridges in general as bad just because some have been hacked.”



Annison believes bridge hacks are caused by the concentration of value within cross-chain bridges, not by the bridges themselves.



<blockquote class="wp-block-quote">“If you think of wars, you try to bomb bridges to stop goods and services moving across,” Annison said. Recent cross-chain bridge hacks are not happening “because bridges are inherently weak infrastructure, it’s because they have a concentration of value.”</blockquote>



Annison believes that all crypto assets come with risk, and bridges are just the risk “flavor of the month” following stablecoins in May and NFTs before that. Bridges should become more secure as protocols become more technologically mature.



It remains to be seen if market participants agree.



Sky Mavis’ Ronin Bridge, which was compromised for $625 million in April, <a href="https://cms.blockworks.co/sky-mavis-reopening-ronin-bridge-with-enhanced-security/" target="_blank" rel="noreferrer noopener">reopened</a> this morning. Close to $9 million in assets have already left the chain, according to Messari.



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