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My speculation on this is that such a failure is catastrophic enough to destroy an entire blockchain. Solana has made billionaires out of a small group of peopl

by Kranar 5y ago

My speculation on this is that such a failure is catastrophic enough to destroy an entire blockchain. Solana has made billionaires out of a small group of people and they'd much rather fork over the 300 million dollars to plug this hole so as to preserve the remainder of their wealth, instead of having Solana crash to become worthless. While in principle a bug like this could have happened on Ethereum, or any programmable blockchain platform, ultimately this attack happened on the Solana blockchain and is an attack on Solana. The people who have a vested interest in seeing Solana survive will have coughed up the funds. Finally, it's worth keeping in mind that while failures like these become very public and it seems like cryptocurrencies are always doing nothing but crashing, failing, and losing money, there are also plenty of people making millions and even billions of dollars a year offering crypto related services. To those folks 300 million dollars, while not trivial by any means is also not the end of the world if it will allow them to continue operating.

vmception 5y ago
Also noteworthy is that bridge technology is what allows these chains to have immediate utility to the market faster. Centralized Exchanges are extremely slow in listing new blockchains, especially meta assets on those blockchains. For example, want USDC on Solana? Sorry even if your exchange listed Solana and allow for withdrawal of native SOL, they aren't allowing withdrawals of tokens to the Solana network. They dont know, don't care, don't have the development resources to prioritize that, aren't even familiar with a erc-20 standard of tokens yet, and legal hasn't gotten the rubber stamp from the New York Department of Financial Services anyway so why bother catering to the rest of the world.. Whereas the permissionless bridges plug in immediately and billions of dollars of assets can move in without bothering with a centralized exchange. Building starts immediately, forget about the permits. So, private participants fixing a crucial bridge is the rational move.
- wmf 5y ago
  I was wondering how a bridge could hope to earn back $300M in fees in any reasonable horizon, but if we view Wormhole as a loss leader to pump the overall Solana ecosystem (which I guess Jump is invested in) it makes sense.
- dboreham 5y ago
  Also noteworthy: this kind of "trusted" bridge architecture is probably now doomed.
  - vmception 5y ago
    I don't get that impression. It's patched and more resilient now, the exploit occurred with someone watching the github about the patch, or even more likely it was someone on the dev team/discussion about why the patch was needed. The "guardians" are still there and distributed. I don't see more distributed bridge styles being real competitors at least to Wormhole on the Solana network. Individual users didn't lose funds and their exposure is always limited to a few minutes.
oblio 5y ago
Didn't they do the unthinkable a few years back, for Ethereum itself? They forked the immutable database because of a bug or exploit, I forget what it was exactly. Similar story, rich people protecting their assets.
- rvz 5y ago
  The failure of the first DAO for Ethereum in 2016 is what you are talking about. [0] Its a similar story, but this time no individual at the top reversing the whole blockchain of that transaction and hard forking it to cause a revoult against the main blockchain or a new group creating something like Solana Classic, etc. whilst talking about 'code is law'. At least this is indeed 'Code is law'. [0] https://en.wikipedia.org/wiki/The_DAO_(organization) https://en.wikipedia.org/wiki/The_DAO_(organization)
- roland35 5y ago
  Yup, it was called "the dao" and a hacker ran away with a third of their Ethereum. https://en.m.wikipedia.org/wiki/The_DAO_(organization) https://en.m.wikipedia.org/wiki/The_DAO_(organization)

by Kranar 5y ago

vmception 5y ago

Also noteworthy is that bridge technology is what allows these chains to have immediate utility to the market faster. Centralized Exchanges are extremely slow in listing new blockchains, especially meta assets on those blockchains. For example, want USDC on Solana? Sorry even if your exchange listed Solana and allow for withdrawal of native SOL, they aren't allowing withdrawals of tokens to the Solana network. They dont know, don't care, don't have the development resources to prioritize that, aren't even familiar with a erc-20 standard of tokens yet, and legal hasn't gotten the rubber stamp from the New York Department of Financial Services anyway so why bother catering to the rest of the world.. Whereas the permissionless bridges plug in immediately and billions of dollars of assets can move in without bothering with a centralized exchange. Building starts immediately, forget about the permits. So, private participants fixing a crucial bridge is the rational move.

wmf 5y ago
I was wondering how a bridge could hope to earn back $300M in fees in any reasonable horizon, but if we view Wormhole as a loss leader to pump the overall Solana ecosystem (which I guess Jump is invested in) it makes sense.
dboreham 5y ago
Also noteworthy: this kind of "trusted" bridge architecture is probably now doomed.
- vmception 5y ago
  I don't get that impression. It's patched and more resilient now, the exploit occurred with someone watching the github about the patch, or even more likely it was someone on the dev team/discussion about why the patch was needed. The "guardians" are still there and distributed. I don't see more distributed bridge styles being real competitors at least to Wormhole on the Solana network. Individual users didn't lose funds and their exposure is always limited to a few minutes.

oblio 5y ago

Didn't they do the unthinkable a few years back, for Ethereum itself? They forked the immutable database because of a bug or exploit, I forget what it was exactly. Similar story, rich people protecting their assets.

rvz 5y ago
The failure of the first DAO for Ethereum in 2016 is what you are talking about. [0] Its a similar story, but this time no individual at the top reversing the whole blockchain of that transaction and hard forking it to cause a revoult against the main blockchain or a new group creating something like Solana Classic, etc. whilst talking about 'code is law'. At least this is indeed 'Code is law'. [0] https://en.wikipedia.org/wiki/The_DAO_(organization) https://en.wikipedia.org/wiki/The_DAO_(organization)
roland35 5y ago
Yup, it was called "the dao" and a hacker ran away with a third of their Ethereum. https://en.m.wikipedia.org/wiki/The_DAO_(organization) https://en.m.wikipedia.org/wiki/The_DAO_(organization)