Partnered With:

Why is the LP cross-chain mechanism safer?

Read this article in 16 Minutes

The emergence of cross-chain DEX makes it easy and fast for DeFi users to detour through the central trading platform for cross-chain token transactions.

Source: Hurricane Wap

The O3 theft of coins to cross - chain security issues to the forefront.

In the early hours of August 11, the hacker wrote on the Ethereum Network: "Why did you choose to attack Poly Network? Because cross-chain protocol attacks are very popular these days."

"Attack across the chain" is really hot

According to PeckShield, there have been 19 DeFi security incidents so far in the third quarter of 2021, six of which occurred over cross-chain protocols, leading the list with related losses of $644 million; Ethereum was second at $29.37 million; Polygon came in third with losses of $1.22 million.

It can be seen that even if the $611 million involved in the O3 event is excluded, the loss caused by the cross-chain protocol security event is still the highest in the DeFi field. From another point of view, the frequent occurrence of cross-chain security incidents and the huge amount of money reflect the hot cross-chain protocol itself.

The emergence of cross-chain DEX makes it easy and fast for DeFi users to make a detour through the centralized exchange for cross-chain token transactions. Traditionally, cross-chain transactions can take anywhere from tens of minutes to days and cost large commissions. In this scenario, the cross-chain DEX, which takes only 2-3 steps and is as fast as the second level transaction, is well accepted by users. However, the recent frequent security problems make users realize that in addition to efficiency and rate, security may be the most important issue when choosing cross-chain DEX.

What are the potential risks of cross-chain DEX?

PeckShild statistics from a data point of view, nearly two months of centralized outbreak of cross-chain security issues mainly in the protocol "logic error" :

Specifically, the potential risks of cross-chain DEX are as follows:

1. False recharge vulnerability -- THORChain attack event

The fake top-up vulnerability is where hackers use fake tokens to cheat contracts so that cross-chain Bridges can generate real tokens for hackers. THORChain suffered a fake recharge attack because the initial token symbol was ETH in the function to verify the token address. The attacker forged an ERC-20 token with the symbol ETH on the Ethereum chain to deceive the cross-chain bridge and obtain the real ETH token.

2. Multiple sign vulnerability + quota vulnerability -- ChainSwap was stolen for the second time

ChainSwap second stolen because cross link bridge white list quota is by the node address automatically increases, but at the time of inspection white list, originally need to sign the address due to configuration errors become single sign, a malicious attacker only need through the chain into multiple signature of one of them, the Receive function calls another chain can be transferred assets.

3, full payment risk

Take the BNB of the OK chain (OEC) for example. Anyswap has issued BNB for OEC, but the BNB is not issued by the government but by Anyswap. Since BNB itself does not support the OEC public chain, THE BNB on OEC is not equivalent to the BNB on BSC. OEC and BSC as a different public chain, OEC itself is unable to produce any BNB, in fact, the BNB on OEC is by Anyswap BNB "Bonds" issued and circulated in OEC.

4. Private key leakage risk -- Anyswap attack event

Anyswap The main reason for the attack is that the signature uses repeated R values. If two transactions signed by the same account have the same value. The R value of the signature, then the hacker can work backwards to deduce the private key for the account. The account can be reused on the BSC, ETH, and FTM, so the assets of the account are stolen on multiple chains. It's worth noting that this also has to do with a single account having too many permissions.

5. Lightning loan arbitrage -- bEarn Fi event

The attacker lends out BUSD through lightning loan, generates ibBUSD through Alpaca Finance's loan, and carries out arbitrage attacks by taking advantage of the price difference between ibBUSD and BUSD through bEarn Fi's contract strategy vulnerability.

Keeper (Relayer) replacement + Signature forgery - O3 attack event

By disguising the transaction of replacing Keeper as a normal cross-chain transaction, the attacker replaced the address of cross-chain relay Keeper in Poly Network as his own address. In addition, the verification function of relay Keeper was not difficult enough, and only 4 Bytes were checked. After forging Keeper, the attacker managed to forge his own address as Keeper address by colliding with the required 4 Bytes, and ransacked Poly Network's cross-chain assets by calling LockProxy contract through signature.

Risk prevention starts from agreement

These six risks are identified by the security team of Hurricane WAP, a new LP cross-chain protocol project. As an LP cross-chain protocol that is a comprehensive upgrade compared to the traditional single currency cross-chain, HurricaneSwap deployed on Avalanche has the top architecture consultant in the blockchain industry -- Ted Yin, the first author of HotStuff Consensus and currently the chief architect of Avalanche Public Chain.

As can be seen from the above, most of these attacked cross-chain protocols have their own protocol vulnerabilities or logic errors. To make full prevention, the security deployment of cross-chain DEX must be at the protocol level. In view of the above risks, hurricane WAP, a more advanced LP cross-chain protocol constructed by the industry top team, has already made its own guarantee scheme:

1. False recharge vulnerability:There is no risk of false recharge in the code audit of Hurricane WAp by Pie Shield. At the same time, hurricane WAp can support in Station cross-chain currency has strict currency restrictions and contract address restrictions, to avoid false recharge loopholes.

2. Vulnerability risk of multiple signing and quota:Currently, hurricane WAP's contract code does not contain the code for looting user LP assets. Details can be seen in the audit report of The party Shield. There is no possibility to extract user liquidity through multiple signing.

Liquidity cross-chain Bridges such as Chainswap complete cross-chain by casting cross-chain mapping tokens by deposing tokens in contracts. Whitelisted users rely on quotas to store and withdraw liquidity in Chainswap. Hurricane WAp does not have a hard quota cap. Users can draw liquidity from their LP tokens, which avoids multiple signing and quota loopholes.

3. Payment risk:Hurricane WAp's aToken is a mapping of assets in the source chain. Currently users can compare the number of liquid assets locked in Station contracts with the number of aToken issued in Hurricane Wap to see if the two are issued at 1:1. In the future, we will also work with Chainlink to give aToken more stable rigid payment characteristics

4. Risk of private key disclosure:Hurricane Wap has absorbed the risk of Anyswap's private key being leaked. There is no signature with a duplicate R value in the transaction, which prevents the attacker from pushing the key back. Second, the team used a dedicated key management tool during the contract deployment phase to avoid the risk of leakage caused by storing private keys in plain text.

5, the risk of lightning loan:The core way lightning attacks profit is the price gap. Hurricane WAp will update the liquidity pool price and other chain token price in real time by means of predicting machine feeding, so as to avoid the volatility caused by the price manipulation of lightning loans. In the future, it will also introduce circuit breaker mechanism to further prevent the lightning loan attack by suspending the call of related token contracts.

In addition, & have spent HurricaneAlliance nodes will carry out arbitrage based on the token spread to regulate the transaction pair price. If the lightning loan attack causes the price of a certain generation of coins to fluctuate sharply, the node will arbitrage and reduce the price gap, reducing the attacker's attack income.

6. Risk of collision between Relayer replacements and hashes:A keeper-like presence in Hurricane Wap is the Roke Protocol master account. The Roke Protocol cannot manipulate the flow of the LP locked in the Station; On the other hand, operating accounts for aToken Mint and Burn are limited to & NBSP; Roke Protocol Owner account. There is no counterfeiting aToken by replacing Roke Protocol.

Hurricane WAp: Innate advantage + Safety bonus

One of the main reasons for the innovation of single currency cross-chain to LP cross-chain was that hurricane Wap team saw the risk of the current cross-chain mechanism. As a more advanced cross-chain mechanism, Hurricane WAP LP cross-chain protocol has natural security advantages compared with the traditional single coin cross-chain, the most fundamental difference is that under THE LP mechanism, the attacker cannot escape the asset through the single coin cross-chain.

In addition to the security features of the LP mechanism itself, Hurricane WaP also uses the Roke Protocol, Hurricane Station and HurricaneAlliance alliance node, From the cross-chain asset price difference, LP authority and decentralized security verification and other aspects of the asset security protection. Behind these security mechanisms, top members of the industry, such as Ted Yin, build the protocols, code and logic underlying the project.

Everything new comes with risks. What the hacker said in the O3 event is right. This attack actually sounded the alarm for O3 project and DeFi industry again.

No man is born to do evil, unless you put the opportunity in front of him.