Atomic NFT marketplace: An NFT Marketplace that offers trust minimized cross chain NFT interoprobability.
The security of Cross Chain bridges is one of the topics that has been discussed and studied for a long time. No matter how secure you build your bridge, the only weak link results in the theft of all assets on the bridge. Before entering the safety of the bridges here; Let's explain the basic working logic of bridges built with Lock, Mint and Burn functions.
In fact, Cross Chain bridges do not play a very different role than central banks. You entrust the native asset in chain A to the bridge (lock), and the bridge prints you a completely artificial wrapped asset in chain B (mint). And the assurance it gives you is this: you can bring back wrapped assets from chain B to me whenever you want, and when you do, I will burn (burn) the artifacts from this chain B and return the native assets from chain A.
This is where the vulnerabilities in the bridge you entrust your assets to result in the value of the artificial assets in the B chain being reset.
While most of the hacks here were caused by the security of the bridge, an offchain-side secure bridge like Nomad was also unfortunately hacked due to a smart contract failure and approximately $190 million worth of assets were stolen. So no matter how secure you make the communication of the two chains, there is a risk of bugs wherever there are smart contracts. Almost all bridges have similar smart contract risk, except IBC and XCM, which eliminate smart contracts and develop protocol-level solutions. Since we cannot eliminate this risk, we have to find a different solution, so what is it?
Decentralized AMMs like Uniswap are platforms that allow users to exchange their tokens and coins. Buyers pay a commission for this swap, while liquidity providers receive it as a reward. This allows users to trade without having to wait for an order book to be matched. What if we make this swap cross-chain?
Atomic Swap-based bridges, which work differently from classical bridges that lock assets on one chain and mint on the other, simply aim to do it between chains made by an AMM. Just like in AMMs, there are liquidity providers here too. Unlike AMM, here liquidity providers receive commissions from exchanges between chains. The user exchanges token A, which is the native asset of chain A, and token B, which is the native asset of chain B. In this way, the native existence of each chain stays in that chain. If there is a security vulnerability on the bridge, it becomes more advantageous in terms of security than normal bridges, where all of the locked assets can be stolen, since only the assets of the users who are transferring at that moment can be stolen. There are also disadvantages, of course: liquidity. Connext, Sushiswap's Layer Zero integration, Thorchain are some projects that make cross-chain bridging possible using this method.
The Atomic Swap system was developed to reduce the reliance on bridges. We will come here again.
Current NFT bridges and problems: Since NFTs cannot be divided and copied unlike normal tokens, bridging NFTs is more complex than bridging the tokens we know and is full of security vulnerabilities. • The most important vulnerability is that the reversibility of the wrapped NFT on the other chain depends entirely on the security of the bridge. Let's explain through an example; you have an NFT in the Ethereum network and you have passed this NFT to the Avalanche network with a bridge, if the bridge you use is hacked, the value of the NFT in your hand is now zero. • The originality of the NFTs is completely destroyed, so the value of the NFT in your hand decreases to zero in case of hacking of the bridge. • The bridge in NFTs designed as Omnichain has an approval mechanism based on permissioned oracles. There are problems such as the possibility that the originality of the NFTs can be corrupted in case of manipulation of the Oracles. What we developers need to do here is to bring together buyers and sellers on two different chains, without compromising the originality of NFT and tokens.
I think we agree that both NFT and native tokens are locked in another chain and minted in another chain creates security problems. Connext; A project that solves erc20 bridging by combining Optimistic bridge and Atomic Swap features. An update that enables cross-chain messaging as an optimistic bridge is also currently on the testnet. We aimed to solve the problem in NFT bridges by combining the application of the optimistic bridge infrastructure (Connext) and Atomic Swap in NFTs.
We have used the Connext for generalized cross chain messaging, and optimistic bridges perfectly meet our needs. We used connext because;