On Friday October 7, Binance tweeted out a troubling announcement that the Binance Smart Chain (BSC) had been temporarily paused following an attack.
According to Paradigm researcher Sam Sun, the hacker used a “proof forge” attack to convince the Binance Bridge to issue one million BNB tokens. Following the success of the first attempt, the hacker used the same trick again, creating another million BNB tokens that were then sent to their wallet.
According to blockchain security firm SlowMist, while the attacker managed to create 2 million BNB tokens worth roughly US$560 million, they only managed to escape with a total of US$110 million as the majority of the exploited funds couldn’t be transferred following the suspension of activity on the Binance Smart Chain.
Jay Freeman weighs in on the Binance bridge exploit
“This exploit is similar in that it was a mistake in code that likely wasn’t even tried to be proven to be correct before it was deployed,” he said.
“The core issue in this ecosystem is that a [cross-chain bridge] is simply not a mechanism that tolerates mistakes.”Jay Freeman (Saurik)
“You can’t push something that sort of works and iterate on it in the field and you can’t mitigate issues with layers of heuristics and defence in depth protections,” he added.
While a report from blockchain investigation firm Chainalysis says that implementing industry-wide code-auditing standards is an important next-step in security upgrades, Freeman suggests that airtight cross-chain bridge security may require more substantial efforts.
“I think we need to see investment in things like formal models and proof assistants. I’d claim that the biggest impediment to building secure solutions in this space is that we’ve standardised on programming languages that make it very difficult to develop ‘correct’ software,” he said.
For context, formal models refer to the mathematically rigorous process of ensuring the underlying validity of code while proof assistants are a type of software that help to validate complex strings of code.
“It requires almost unobtainable attention to detail to avoid making serious mistakes in a mechanism that you have to get right the first time and where the attacker can simulate your entire stack until they find a single-transaction exploit that you can’t see coming,” Freeman explained.
Freeman added that while the issue may gradually improve, he expressed concern at the lack of patience and low prioritisation of security in bridging protocols.
“I do feel like they will get better over time … but it has been somewhat demoralising that the industry doesn’t really have the tool[s] to build secure software and has been charging ahead with building and deploying critical systems without the use of even basic things like proof assistants,” he said.
“I’ve even seen some of these companies have very little in the way of in-house security experts, which I would have expected to be table stakes.”
At the end of the day Freeman says that the real solution to safe and secure blockchain interoperability comes down to ridding cross-bridges of any unnecessary complexity that opens them up to attack.
“The best thing we can do to prevent these kinds of issues is to build simpler systems using tools that help us have confidence in the correctness of our implementations.”
Freeman discussed the issue of cross-chain bridging in great detail during a lecture on Decentralised Finance (DeFi) in June this year.
As of today, 14 separate cross-chain bridge hacks now account for more than $2.5 billion in losses in this year alone, as developers and founders are forced to learn the hard way about vulnerabilities in their tech.