Cross-chain bridge failure

How it happens

1. 1 In this model, the asset stays locked on the origin network and a representation is minted on the destination network. Other bridge models have distinct mechanisms.
2. 2 The representation depends on the match between the amount minted and the assets that can be released on redemption.
3. 3 A failure in the contract, or in the mechanism that authorises minting, can break that match and compromise the value of the representation.

An example, with no proper name

On a bridge that requires validator signatures, control of enough keys can allow minting without a matching deposit. The tokens begin to circulate on the destination network, but the amount available at the origin does not keep up with the minting. This example illustrates one possible failure of that model.

The example describes the mechanism, not a real incident. Concrete cases in this segment belong to the people who lived them, and presenting them here would suggest an involvement that did not happen.

What the impact is

Depending on the failure, the impact may reach a transfer in progress or positions that already hold the represented asset. The risk can continue after the crossing if restitution depends on the bridge.

What reduces the exposure

• Identify which asset will be received and which mechanism its restitution depends on. Compare that dependence with how long you intend to hold the position.
• Check who validates the messages or authorises issuance, and which controls are required. In models that use signatures, also examine their independence.
• Include the bridge on the exposure map, together with the networks and the contracts in use. The connection adds its own controls and its own possible failures.

What a claim in this family needs to prove

• The hashes of both ends of the crossing: the deposit at the origin and the absence or the failure at the destination.
• The protected address declared at purchase, on both networks where that applies.
• The bridge operator's official communication about the incident.

The exact requirement is the one in the published version of the purchased coverage contract. This list is what is usually necessary in this family.