Why Crypto Needs Wanchain — The $570 Million Binance Cross-chain Exploit You Didn’t Hear About
Back in October, Binance announced it had fell victim to a hack that resulted in the loss of 2 million BNB tokens which, at the time, totaled a whopping $570 million. The hacker, who still remains unknown, targeted the BSC Token Hub that bridges the old Binance Beacon Chain to the now-current BNB Chain.
The root cause of this exploit was confirmed to be a vulnerability of the bridge’s underlying IAVL package incorporated in its contract developed by Cosmos. Unsurprisingly, this compromised architecture affected other projects that utilized the IAVL package, thus prompting Cosmos to release an emergency patch on Oct 8th.
After draining the funds, the hacker used a myriad of different cross-chain DeFi applications to quickly swap the stolen assets across multiple layer 1 and 2 protocols to avoid any potential blocklists. In response to the attack, Binance commanded swift action of its validators to suspend further BSC operations to investigate and recover any salvageable funds. Binance’s efforts to recover and freeze funds ultimately prevented the attacker from making out with the entirety of the funds, leaving only about $100 out of the $500 drained from the platform.
The Industry Has a Cross-chain Problem
For the past two years, the lack of progress surrounding cross-chain infrastructure has plagued the industry as users are typically forced into a stressful process of transacting assets from one chain to another. On a macro level, The lack of cross-chain functionality has severely limited the further advancement of NFTs, DeFi, CBDCs, and crypto’s overall goal of mass adoption.
While some projects have finally begun racing to meet the growing demand for cross-chain infrastructure, the Binance bridge attack has further highlighted the lack of comprehensive cross-chain security in the industry. Since 2021, cross-chain protocols have already lost roughly $1.5 billion in assets due to exploits. As there continues to be a lack of emphasis on the security structures surrounding cross-chain protocols, this trend of instability is likely to continue until these issues are addressed. While cross-chain bridges have started to become a focal point of worry for many, one project has proved that cross-chain functionality can be made safe enough to handle the ever-growing popularity of crypto. This project is none other than Wanchain.
What is Wanchain?
Wanchain is a well-established, decentralized blockchain interoperability solution harnessing the latest in blockchain decentralization, interconnectivity, and scalability for commercial, public, personal, and state use. Wanchain works to drive blockchain adoption through interoperability, security, and transparency by having a next-generation blockchain as its foundation equipped with fully decentralized cross-chain bridges that interconnect many of the different existing and future blockchain networks.
How it Works
While most cross-chain protocols still struggle with flawed contracts, consensus mechanics, and decentralization behind their cross-chain platforms, Wanchain has gone on to create one of the most advanced node systems in the industry. These nodes, known as Storeman nodes, manage the exchanged assets between blockchains in a way where funds are never obtained by a centralized entity. This system enables users to transact freely through different blockchains and DeFi applications without the fear of being overexposed to a centralized entity. To break this down in simple terms, storeman nodes are collateralized and are elected for delegation every month to perform cross-chain transactions without revealing the private keys of the accounts involved. This process requires a minimum of 17/25 node signatures for consensus. The benefit of this collateralization and election system prevents the possibility of collusion.¹ This aspect alone has previously been a point of failure in other projects such as the Ronin bridge, which was responsible for one of the largest cross-chain hacks in history.
As the demand for cross-chain functionality continues to increase throughout the space, Wanchain will continue its reputation as the industry standard for blockchain interconnectivity. With an emphasis on decentralization and security at its core, Wanchain will continue to prove itself as both an industry leader and as a crypto conduit that seeks to serve all aspects of the digital blockchain world!
