Why DeFi Bridge Hacks Fail To Deter Investors and Growth? Q&#038;A

In the DeFi world, bridges (which allow users to send assets from one blockchain to another) are ranked third in terms of total value locked (TVL), after decentralized exchanges and lending protocols. According to analytics firm DefiLlama, $21.8 billion worth of crypto was locked in bridges as of March 2022. This reveals a surprising trajectory for bridge protocol adoption, given the tremendous loss resulting from various DeFi bridge hacks.

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One of the most severe attacks occurred when the Ronin bridge was hacked for $540 million. Prior to this, BNB Chain’s Qubit Finance bridge and Solana Wormhole were exploited for more than $400 million. These cases followed the PolyNetwork bridge hack in which $610 million were stolen, the largest hack in the history of crypto.

These startling figures illustrate significant security concerns associated with bridge protocols — However, investment in and adoption of bridges continues. Axelar, for example, has raised a total of $63.8M in funding over 6 rounds.

Sergey believes the continued growth and investor backing of bridging solutions point to the necessity for these technologies. As we move toward Web3, interoperability created by these bridges will become an imperative aspect of the blockchain economy, without which it cannot scale. Crucially, Sergey believes that bridges being hacked is due to their centralization and lack of technical security, which should be built-in.

Korea IT Times sat down with Sergey Gorbunov, Co-founder and CEO of Axelar, the universal decentralized interoperability network, and industry unicorn, on why blockchain bridges are continually growing in capabilities and adoption despite high profile DeFi hacks of many cross-chain bridges in the space.