Hacks and frauds have severely hurt cryptocurrency investors this year. One explanation is blockchain bridges, which cybercriminals have discovered to be an especially convenient way to reach cryptocurrency investors.
Blockchain bridges are becoming more and more widely used as a method of money transfer for cryptocurrency users. These bridges amateurishly connect networks to allow for quick token swaps. However, by deploying them, people conducting transactions in crypto are avoiding a centralised exchange and utilising an unsecured network.
According to data from blockchain analytics company Chainalysis, breaches on these cross-chain bridges have cost users a total of about $1.4 billion since the year’s beginning. The largest single event was the theft of a record $615 million from Ronin, a bridge that supported the well-known nonfungible token game Axie Infinity, which allows players to earn money while they play.
The $320 million that was taken from Wormhole, a cryptocurrency bridge supported by Wall Street high-frequency trading firm Jump Trading, was another incident. A $100 million attack on Harmony’s Horizon bridge occurred in June. And in a breach last week that was directed towards Nomad, hackers were able to capture approximately $200 million.
The frequency of bridge exploits is astonishing considering how young the idea is. Chainalysis statistics show that so far in 2022, bridge heists have been responsible for over 70% of all crypto-related attacks.
Hackers recorded 80 instances in the first half of 2022, which is 108% more than the 38 incidents recorded during the same period in 2021. Attacks rose from 52 in the second quarter of 2022 to 96 in the second quarter of 2022, an increase of 85%.
Another research from crypto security firm Immunefi says that the web3 ecosystem suffered a “loss” of around $1.23 billion in the first quarter of 2022. Adrian Hetman, a tech lead at the firm opined that the total has increased about 700% when compared to the previous year’s quarterly losses of $154.6 million.
Hetman further said that these bridges “possess enormous sums of money” which makes it easier for hackers since it becomes a “very appealing target” due to the high volume of traffic.