Crypto Bridge Heists Swiping $1 Billion Spur Race for Alternatives

There are opportunities for exchanges and other businesses to offer more secure alternatives because of the high-profile hacks on the crypt.

FTX and Coinbase Global Inc. are increasing their capabilities to provide bridge-like services on various blockchains, so users invested in Bitcoin or Ethereum can easily participate in other networks. FTX launched a marketplace last year that allows customers to trade Solana-based nonfungible token and swap their ether for Sol coin to buy them. Users can deposit and withdraw NFTs on Solana via FTX instead of a bridge. Maple Finance is an example of an app developer that is moving onto new blockchains.

While some measures may have been in the works prior to the breaches, their urgency and attraction have increased after hackers stole more than $1 billion from the bridges. A survey of 500 U.S. adults showed that 80% don't trust digital currency networks to protect their money. The value locked on bridges connected to the ether is down in the past 30 days.

Sam Bankman-Fried, chief executive officer of FTX, said in an email that it wouldn't shock him if more users wanted exchanges as bridges.

It's unclear who runs the bridges, who can access their funds and how, and whether users will be reimbursed in case of a hack, when using a software-operated bridge. On the other side of the spectrum, a more centralized alternative may be run by a company that is licensed and regulated, and can be held accountable for any problems.

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Users can now send, receive and store Solana and SPL in the Coinbase wallet. If investors had previously wanted to move aUSDC coin, they would need to deposit it into Coinbase and swap it forUSDC-SPL on the market maker Raydium. Austin Federa is the head of communications at Solana Labs.

Federa said in an interview that the more exchanges do this, the easier it will be to explore Solana's offering.

Users will be able to connect to its dapps and manage their Solana NFTs directly within their Coinbase wallet, according to the company.

Maple is one of a number of non-exchange apps that are building versions for other criptoms to help customers avoid bridges.

Maple was launched on Solana in late April. An investor with a stable coin had to go through a bridge to deposit funds. The deposit can be made directly.

Sid Powell, CEO of Maple Finance, said that the institutional and corporate partners wanted this security. As security and performance of bridges get better, more people will use them, he said, noting that Maple is considering expanding onto other networks.

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It can take a lot of rewrites of code for an app to go onto different blockchains. If the underlying balloons are used, the growth of the cripto apps can be faster.

Bodhi Pinkner is a portfolio manager at Arca, a digital-asset management firm. If you assume every application is deployed cross chain, it will reduce the need for bridging.

Even though bridges won't be disappearing soon. They are necessary for heavy users like Arca.

Pinkner said in an interview that people are becoming more aware of the bridges they use.

With help from Yue Qiu.