Long live bridges, bridges are dead by Christina Norgard Rud

something working? Yeah. Cool. Okay. So, hi everyone.

My name is Christina. I'm one of the co-founders of Squid. I'm here today to tell you a bit about the development of bridges, their security risk, and how we can move into a safe and efficient interchain future. So, I think we can all agree that the multi-chain thesis has played out. We have a ton of different chains.

They all solve for not all but they solve for different use cases. Some solve for scalability rollups. Some solve for finality. Some solve for security. Um and some solve for very specific use cases which is also what is called the app chain thesis which we've also seen played out.

And what this really means is that we have a ton of opportunities for adoption into this industry which is what we're trying to do. Um, and what's also really cool is that it has led to a bunch of different communities evolving. However, this has also come with its own set of problems and the main the essence of the problems is really fragmentation. We have fragmentations of liquidity of applications and also importantly communities because somehow the success of these um chains have been dependent on a kind of tribal community nature where we're kind of going against each other in a system where we really all need to be friends. It also means that we have for user especially entry and existing users we have a whole different set of UX standards which means that it's pretty difficult to to enter uh enter new chains and enter new ecosystems or even if it's not difficult it's really really timeconuming also from a design perspective this makes it really really challenging and it's really antetical to to widespread adoption and uh But sorry but except beyond even though we've had these challenges the multi-chain world is like a tremendous success.

I mean even look around. We're at Eat Denver and we have a ton of different projects represented a ton of different communities and from what I see people are pretty friendly. Um how and what also happened I think is that a large portion of the success is a playbook that emerged when people would launch new ecosystems that the way they did is that they launched these really really hefty liquidity incentives which meant that you had these what can really only be called insane yield opportunities and we had suddenly a very urgent need to move liquidity across chains. And wherever there is an urgent need especially with a lot of profit people will fill that need and supply right. So people started building bridges.

So the very first bridge was actually bitco first bridge with adoption. A lot of people have tried to build bridges many times and we should acknowledge that um is Bitco's wrap BTC bridge which meant that you can send and wrap Bitcoin and get utility um on this OG asset in the AVM world. Right? This is a fully custodial and one directional bridge and to this day is actually the most popular bridge and maybe that will change. Uh the next set of bridges were onetoone token bridges.

So basically bridges that allowed you to send assets for for example Ethereum to Avalanche and the way that most of these works is through a lock and mint and burn functionality. So what happens here is that there's um two contracts on either side of the chain. So you say you send you want to send USCC from Ethereum to USC on Avalanche. You have USC on Ethereum gets locked up and then it gets minted an Avalanche representative of that on the other side that then you can use in the Avalanche ecosystem which is cool and great. Um and then when you go the other way then you burn the asset and then unlock it.

And these I think it's hard to keep track of all the bridge solutions, but there's been over 80 bridges, token bridges built, which is pretty cool. And what that means is that we had an insane expanded utility of assets. For protocol designers, you have a whole new design space to operate. And for users, you have a ton of new use cases and and features. However, um, as most of you may know, there's been quite a few issues with these bridge solutions.

So, first of all, we have this notion of, well, I'm calling it a notion of rapid assal. So, this wrapped asset, even though you of course have this asset now that you can use in this ecosystem, you need support for that asset for it to be fully utilized and efficient, right? And that means that you need to then have markets for all these wrapped assets. And we ended up with, as you can see Elmo demonstrating here, a world that trying to solve more capital efficiency just actually led to more inefficiency. And you also sometimes would end up in situations where you would need native gas, right, in order to do anything on this chain that you were going into.

And if your wrapped as didn't have support for that, you're stuck. you can get out of it, but it's very time consuming and hard. And as we all know, time is money and this is like not what we want. It also doesn't easily extend to NFTTS, meaning that, you know, you're also avoiding like innovation for a huge part of the ecosystem. And importantly as well, the UX is vastly different across all of these bridges.

And I don't know the max number of clicks that a bridge has but it's often eight interactions from the user which is completely insane and daunting and scary and it's slow and overall you know like bridging tiny amounts is people feel typically safe bridging large amounts is a thing left for the brave and what I think this really is is that we had these kind of patchwork solutions deployed in a boom you know like there was so much innovation so much space, so much capital and people just like wanted access to these yields, right? So, they just went in. Um, but importantly, I think this really happened not only at the cost of design and UX, but really at the cost of security. So, typically a lot of these locked assets are held by multisig sometimes even as little as two of three and sometimes up to five of seven. I mean, sometimes more.

But what that leaves you with is like a really really really few situations of someone something being compromised before things go really wrong which is what it has. So beyond some situations that I'm not going to get into like this is what we've become known for in mainstream media. This is from Wired New York Times Techrunch. It's completely insane and really really sad at the end of the day. Um there's So the point of this is that it's such a large number that it's like hard to even read but it's two and a half billion and counting funds have been lost.

Um and what we find ourselves in then is okay so we are part of the innovation cycle where we need interoperability between all these chains in order to progress and we basically have infrastructure that's avoiding anyone using this because it's just like dangerous and crazy. So what I think is in order for us to like usher into the new interchain era, which is what we're calling it now, uh is that we need to have solutions that are built with interoperability from the start. Blockchains are really hard. What we're doing is super hard. Creating systems that you can translate messages and send things between chains is it's insane.

like we're at the right at the cutting edge, bleeding edge, um, of new technology in some of the most experimental technology that exists. And what we really need is something like a crosschain communication network instead of these native bridges, which not only will disrupt and make bridges obsolete, it will unlock a whole new set of possibilities that I'll get to. So, there's a lot of different projects that are building with this mindset. Um, but the one that I'm going to highlight is Axelar. So, and Squid.

So, Axel is a crosschain communication network and what it really does is that it enables blockchains to talk to other blockchains in a completely secure fashion. Axar itself is a Cosmos chain secured by an unbounded um set of validators and it also has this feature called general message passing. And what that does is that it enables function calls across chains sending assets sending messages and importantly for that user that's all done in one click which is a big improvement. So introducing Squid as part of what I call this modular interropability stack and also a key thing here is that for innovation to be able to happen at the rate it should you need to have modularity you need to have composibility. You know, this is what part of what's made DeFi so successful, which is also why this is great.

So, what Squid is is that technically we're a router, but you can also think of us as a crosschain building block where Axar connects to different blockchains and gives them um crosschain or interchain functionality. We can do that for applications. So, we can give we can make applications the ability to do crosschain interactions. Um, most importantly, what we're focusing on now is swaps. So, the way that we do that is that we actually we don't custody funds like a bridge would do.

So, what we do is that we're connected to dexes on all the chains that we support and then from the user point of view, you only put in I should have had a demo here. You only put in the asset and the network that you want to go for where you are and where you want to go from. And in the back end we are swapping on source and destination chain but via axar USDC which is the routing asset. So from a user point of view you're not you're never exposed to a wrapped asset and absolutely minimal bridge risk which is fantastic. And importantly we are also connected both to EVM and Cosmos.

So for now it's only transfers from EVM to Cosmos but swaps are coming and just keep on locking. Um Squid is an API SDK and also customizable widget that projects can uh just put into their front end. Um we have quite a few that have done that. And what is really exciting here is that before I get into what's exciting, I think something that's really important is that when you're doing these multihop swaps, you're only as safe as you're only as secure as your weakest link. Squid is always secured by Axlar.

We don't interact with any other bridge operator whatsoever. So you know when you're doing something via Squid, this is the security you have. And also when Axar improves we improve we get access to their features um and we get access to you know all the chains that they also support in a matter of very little effort. So whilst crosschain swaps is the first thing that we've gone to market with and demonstrated and this is live now what is really exciting is for new or and other applications and especially native crosschain applications to be built. What that means is that you as a developer can deploy on whatever chain you want, but you'll get access to liquidity and users from all the whole ecosystem.

And here are a couple of the example use cases that we're really excited about. There are a ton more. And for anyone that's interested in learning more about this or disagrees with me um that the future is absolutely in two chain, please connect with me on Twitter, join our Discord, and follow us on Twitter as well. Thank you.