So far, Cosmos’ IBC seems to have stayed clear of troubled waters.
On August 2, the Nomad token bridge became yet another victim of cross-chain hacking after the protocol suffered a $190 million exploit. Joining a list of casualties alongside Axie Infinity’s Ronin Bridge and Solana’s Wormhole, many industry experts have cast doubt on the future of cross-chain technologies. However, not all cross-chain toolkits have thus far been exploited. Regarding this matter, Cointelegraph spoke with Osmosis’ co-founder Sunny Aggarwal. Osmosis is one of the most popular decentralized exchanges, or DEXs, on the Cosmos hub with $120 million in total value locked. Here’s what Aggarwal had to say regarding Cosmos’ namesake inter-blockchain communications protocol (IBC):
“The major bridge hacks are a reminder to victims that bridges are, in fact, too brittle to be allowed to custody significant amounts of capital at this stage in their lifecycle. High profile bridge hacks cast a light on IBC as being the most viable solution for cross-chain bridging as this understanding acts as an opportunity for the rest of the EVM-based ecosystems to look at IBC as a serious alternative to do cross-chain communication.”
Currently, there are nearly fifty blockchains using IBC to conduct 10 million+ transactions daily, across and ecosystem with $1 billion+ in assets under management, in spite of the market downturn. “The fully trustless nature of the system is what makes it [IBC] work so well,” said Aggarwal.
The DeFi architect then pointed to a recent example illustrating the resilience of IBC: “A huge test to the Osmosis DEX occurred when Terra Luna collapsed. The majority of our namesake OSMO tokens that was staked resided in LUNA/OSMO and UST/OSMO pools. In order to prevent a malicious actor from minting infinite LUNA and draining the pools of OSMO stake, Osmosis governance implemented a trading halt on the Osmosis-Terra IBC channels.”
According to Aggarwal, IBC’s capacity to distribute points of failure through inter-chain sovereignty is precisely what keeps it as “the safest bridging protocol in existence.” Year to date, over $2 billion worth of funds have been stolen from cross-chain protocols, accounting for 69% of all crypto stolen in the period.