Cross-chain is a technological dead-end. Either the future is mostly secured on Ethereum with rollups, or multi-chain.
A (long, but worthwhile) π§΅π
A (long, but worthwhile) π§΅π
Cross-chain bridge contracts securing immense amounts of wealth in a single location (the source side of a bridge) is a bad idea. Not only is it a single point of failure, but it also introduces a massive contagion risk vector for the destination chain.
$611M rekt from @polynetwork2
$326M rekt from @wormholecrypto
$624M rekt from @ronin_network
The common denominator of these exploits are cross-chain bridges. Here's how they work:
An asset is locked in a contract on the source chain.
On the destination chain, an equivalent asset is minted to represent the asset.
An asset is locked in a contract on the source chain.
On the destination chain, an equivalent asset is minted to represent the asset.
The destination chain is effectively trading with IOUs, while the actual asset is stored on the source chain (which is usually Ethereum). This is where the contagion risk lies.
If the source contract gets rekt, the IOU asset is now unbacked and worthless. Every single protocol utilizing that IOU asset on the destination chain has to deal with the fallout (asset mispricing, liquidations, etc).
Because of this, it's likely cross-chain is dead. Anyone claiming otherwise has bags to sell.
Two scenarios remain:
A) Rollup-centric future
B) Multichain future
Two scenarios remain:
A) Rollup-centric future
B) Multichain future
Exploring Option A (rollup-centric):
A protocol only needs to deploy an asset once on L1 and is interoperable by default with all rollups
An offline rollup still allows exits to L1 vs being stuck on destination chain
Enshrined rollups remove L1->L2 bridge risk
A protocol only needs to deploy an asset once on L1 and is interoperable by default with all rollups
An offline rollup still allows exits to L1 vs being stuck on destination chain
Enshrined rollups remove L1->L2 bridge risk
DA flexibility: Rollups can store data on or off chain depending on need
Can be as niche as app-specific or as broad as a general execution layer
Exponentially cheaper security budget
Can be as niche as app-specific or as broad as a general execution layer
Exponentially cheaper security budget
Exploring Option B (multichain):
A protocol would need to natively deploy assets on every supported chain
Each chain would require centralized exchanges to migrate between, or coordinate and build atomic swap capabilities
Different security assumptions between chains
A protocol would need to natively deploy assets on every supported chain
Each chain would require centralized exchanges to migrate between, or coordinate and build atomic swap capabilities
Different security assumptions between chains
Simplicity, composability, and cost win every time. Even if a multichain future continues to be on the EVM, it's unlikely that independent consensus mechanisms will have significant marketshare over a rollup-centric Ethereum.
I expect other chains will have their niche, but most chains (especially EVM chains) will migrate towards becoming rollups as time goes on, especially with the benefits of danksharding as described by @epolynya here:
polynya.medium.com
polynya.medium.com
Shoutout to @0xPolygonZero for being the first (that I know of) alt-L1 to pivot!
I hope you've found this thread informative! Dozens of hours of research went into producing it.
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