Detecting Attacks on Cross-Chain Bridges Using a Simple Balance Invariant

Основные понятия

Lack of end-to-end value accounting in cross-chain transactions is a fundamental design flaw that enables a wide range of attacks on cross-chain bridges. A simple balance invariant that checks for matching inflows and outflows can effectively identify known attacks and likely new attacks.

Аннотация

The paper analyzes the lack of end-to-end value accounting in cross-chain transactions as the root cause of a wide range of attacks on cross-chain bridges. It introduces the concept of a balance invariant, which states that the value of the asset inflow (deposit) in a cross-chain transaction should equal the value of the asset outflow (withdrawal), less any fees or costs incurred by the bridge.

The authors first validate this hypothesis by retrospectively analyzing over 20 million transactions across 11 major cross-chain bridges and 21 blockchains. They show that the balance invariant is sufficient to identify each of the 12 largest known attacks on cross-chain bridges, which collectively resulted in over $2.6 billion in losses. Moreover, they find very few other transactions that violate the invariant, most of which appear to be implementation errors or suspicious activities deserving of further scrutiny.

The paper then describes a live auditing system that monitors ongoing transactions on the Wormhole bridge in real-time, using the balance invariant to detect any violations. The system has been deployed for a month and has successfully alerted on multiple transactions that violated the invariant.

Finally, the authors propose a new bridge architecture called "announce-then-execute" that incorporates the balance invariant checking directly into the transaction flow, thereby preventing unbalanced malicious transactions from ever completing. This approach treats the most complicated components of bridges as black boxes, adds no new attack surface for theft, and requires minimal changes to existing codebases.

Статистика

The total value of crypto assets stolen in attacks on cross-chain bridges between 2021 and 2023 exceeded $2.6 billion.
The retrospective analysis covered over 20 million transactions across 11 major cross-chain bridges and 21 blockchains.
The live auditing system monitors thousands of withdrawal transactions per day across 10 blockchains, accounting for 60% of all withdrawal transactions on the Wormhole bridge.

Цитаты

"Between 2021 and 2023, crypto assets valued at over $US2.6 billion were stolen via attacks on 'bridges' — decentralized services designed to allow inter-blockchain exchange."
"We show that a simple invariant that balances cross-chain inflows and outflows is compatible with legitimate use, yet precisely identifies every known attack (and several likely attacks) in this data."
"We argue that this approach is powerful both due to its simplicity (in a legitimate financial transaction, the value paid should be equivalent to the value received, less costs) and its independence from the vagaries of smart contract details."

Ключевые выводы из

Count of Monte Crypto: Accounting-based Defenses for Cross-Chain Bridges

by Enze Liu, El... в arxiv.org 10-03-2024

https://arxiv.org/pdf/2410.01107.pdf

Дополнительные вопросы

How could the balance invariant approach be extended to handle more complex cross-chain transactions, such as those involving multiple tokens or multiple chains?

The balance invariant approach can be extended to accommodate more complex cross-chain transactions by implementing a multi-dimensional accounting framework that tracks not only the inflow and outflow of individual tokens but also their respective values across different chains. This can be achieved through the following strategies:

Token Valuation Mechanism: For transactions involving multiple tokens, a dynamic valuation mechanism can be introduced to assess the equivalent value of different tokens based on real-time market data. This would allow the invariant to account for the varying values of tokens being transferred, ensuring that the total value of inflows matches the total value of outflows, adjusted for any fees.

Multi-Chain Transaction Mapping: In scenarios where transactions span multiple chains, a comprehensive mapping system can be developed to track the flow of assets across each chain. This would involve creating a unified transaction identifier that links deposits and withdrawals across different chains, allowing for a holistic view of the transaction flow and ensuring that the balance invariant holds true across all involved chains.

Hierarchical Invariants: Implementing hierarchical invariants that consider the relationships between different tokens and chains can enhance the robustness of the balance invariant. For instance, a higher-level invariant could ensure that the total value of assets across all chains remains consistent, while lower-level invariants could focus on individual token transactions.

Fee Structure Integration: The approach can also be refined to incorporate complex fee structures that may vary by token or chain. By explicitly defining how fees are calculated and applied in multi-token transactions, the invariant can be adjusted to reflect these costs accurately, ensuring that the net inflow and outflow calculations remain valid.

By adopting these strategies, the balance invariant can effectively manage the complexities of cross-chain transactions, thereby enhancing the security and reliability of cross-chain bridges.

What other types of invariants or consistency checks could be used to further strengthen the security of cross-chain bridges beyond the balance invariant?

To bolster the security of cross-chain bridges, several additional invariants and consistency checks can be implemented alongside the balance invariant:

Atomicity Invariant: This invariant ensures that a cross-chain transaction is treated as a single atomic operation, meaning that either all parts of the transaction are executed successfully, or none are. This prevents scenarios where funds are partially transferred, leading to inconsistencies and potential losses.

Authorization Invariant: Implementing checks to verify that all transactions are authorized by the appropriate parties can prevent unauthorized access and manipulation. This could involve multi-signature requirements or time-lock mechanisms that ensure only designated accounts can initiate withdrawals.

State Consistency Checks: Regularly verifying the state of the smart contracts involved in the bridge can help identify discrepancies or unauthorized changes. This could include checks on the total supply of tokens, balances of accounts, and the integrity of the contract code itself.

Transaction Rate Limits: Establishing limits on the frequency and volume of transactions can help mitigate the risk of large-scale attacks. By monitoring transaction patterns and flagging unusual activity, the system can prevent potential exploits that rely on rapid, high-volume transactions.

Cross-Chain Event Verification: Implementing a system to verify that events emitted on one chain correspond to expected outcomes on another can enhance trust in the transaction process. This could involve cross-referencing event logs and ensuring that all expected events are recorded and validated.

By integrating these additional invariants and consistency checks, cross-chain bridges can achieve a higher level of security, reducing the risk of exploitation and enhancing user confidence in decentralized finance systems.

How might the lessons learned from securing cross-chain bridges be applied to improving the security of other decentralized financial systems and protocols?

The insights gained from securing cross-chain bridges can be instrumental in enhancing the security of other decentralized financial systems and protocols in several ways:

Emphasis on Robust Accounting Practices: The importance of rigorous accounting practices, as highlighted by the balance invariant approach, can be applied to all decentralized finance (DeFi) protocols. Ensuring that all transactions are accurately recorded and that inflows and outflows are consistently tracked can prevent discrepancies and potential exploits.

Real-Time Monitoring and Auditing: The implementation of real-time auditing systems, as demonstrated in the live auditing of the Wormhole bridge, can be extended to other DeFi protocols. Continuous monitoring of transactions for anomalies can help detect and mitigate fraudulent activities before they escalate.

Adoption of Atomic Transactions: The concept of atomicity in transactions can be applied broadly across DeFi protocols to ensure that complex operations involving multiple steps are executed as a single unit. This reduces the risk of partial failures that could lead to financial losses.

Enhanced Security Protocols: The lessons learned about the vulnerabilities in cross-chain bridges can inform the development of more robust security protocols across DeFi platforms. This includes implementing multi-signature wallets, time-locks, and other mechanisms that enhance the security of asset management.

Community Engagement and Transparency: The need for transparency in transaction processes and the importance of community engagement in identifying and reporting vulnerabilities can be emphasized. Encouraging users to participate in audits and security assessments can foster a culture of vigilance and collective responsibility.

By applying these lessons, the security of decentralized financial systems can be significantly improved, leading to a more resilient and trustworthy ecosystem for users and investors alike.