StellaSwap Rebuilding Strategy

Published on: 07.09.2022
StellaSwap Rebuilding Strategy

StellaSwap Rebuilding Strategy: A Framework for Evaluating Bridges on Moonbeam

Introduction to Potential Bridges on Moonbeam

  • MultiChain: Multichain is a cross-chain router protocol that is currently one of the most popular bridges in DeFi. With a total TVL exceeding $2.5 billion across 62 different blockchain networks, Multichain has possibly the largest market share in the space.
  • Axelar: Axelar is a permissionless overlay network that has been at the forefront of pioneering work on cross-chain communication with its general message passing (GMP). Axelar was recently chosen as the official cross chain service provider for Osmosis, the largest DEX on Cosmos.
  • Wormhole: Wormhole is a generalized cross-chain messaging platform connecting high-value blockchains together, with applications leveraging the messaging layer to facilitate interoperability between ecosystems. Wormhole backed by Jump, a behemoth with tentacles across market-making, a venture capital arm and, increasingly, a team of in-house developers who contribute to projects on several major blockchains.

Bridge Evaluation Parameters

  • Security: The most vital factor for evaluation, covering trust mechanism and security assurances. The former covers the spectrum of trust assumptions embedded within their logic and (operational) verifiers instituted in the system, while the latter covers the depth of audits, code deployment process and external bounties.
  • Financial Coverage: The degree of financial backing, whether internally embedded within the protocol’s model (i.e. reserve fund) or externally via a network of backers, in the adverse event of any exploit.
  • User Experience: The overall experience when using a bridge including usability, intuitiveness, speed and slippage, amongst other things.

Evaluation Parameter #1: Security

Evaluation Parameter #2: Financial Coverage

  • Nomad Bridge Exploit: Nomad bridge was exploited on the 1st of August this year, resulting in a loss of more than $186 million. As the defacto bridge of Moonbeam, many affected users saw their funds diminish in value and thee overall ecosystem TVL plummeted from $187 million to sub-$60 million. Users and affected protocols, like StellaSwap, is still awaiting for the resolution plan from Nomad
  • Wormhole Bridge Hack: On Feb 2 this year, Wormhole’s bridge was exploited for $320 million (120k ETH). Within 24 hours, the vulnerability was fix and the bridge resume operations after Jump Crypto, the backers of Wormhole, backstop the bridge. As users were whole, confidence was restore and ecosystem TVL recovered within days.

Evaluation Parameter #3: User Experience

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