‘IBC is a serious alternative for secure cross-chain communication,’ says Sunny Aggarwal of Osmosis
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 “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.