- Portal claims to be a ‘true’ decentralized cross-chain DEX in contrast to current cross-chain models.
- This claim follows the half dozen cross-chain bridge hackings which collectively lost more than $1 billion.
- Portal intends to create a DEX that embodies Bitcoin’s original intent of self-governance.
Portal, a cross-chain DEX built on Bitcoin, claims to have the technology to improve upon the currently-vulnerable cross-chain bridge model. This is in response to the several hacks that happened in the past months that put user funds at stake.
The Portal Atomic Swap has taken a different approach that introduces no centralization, wrapped tokens, or third-party custody. Instead, all transactions rely on a peer-to-peer approach. If the transaction encounters an issue, it can be rolled back and participants keep their original assets.
The removal of wrapped tokens or validators is a general quality of life feature when processing transactions. Additionally, the peer-to-peer aspect ensures there are no unexpected delays, blocked funds, exploits, or other drawbacks that cross-chain bridges have.
The issue at hand is that the current cross-chain bridge model is prone to security exploits. Hackers have exploited 5 bridges since mid-2021, obtaining more than $1 billion. In other words, the potential loss of funds is a serious threat to the decentralized finance (DeFi) industry.
At least 5 bridges were hacked since mid-2021, attackers were able to steal more than $1B. Never underestimate security audits importance. Three hacks ago @VitalikButerin warned us about cross-chain dangers: https://t.co/jvmLOIEQlE pic.twitter.com/bQoht0FNve— Anton Bukov (@k06a) February 3, 2022
Additionally, the second biggest DeFi hacking happened earlier this February at Wormhole. The mentioned incident saw losses of 120,000 Wrapped Ether (wETH) tokens valued at $375 million at Ether’s (ETH) current price. The effects were minimized by the hacker returning $600 million to PolyNetwork and Jumpy Crypto replacing the lost 120,000 ETH for Wormhole.
In a recent Reddit AMA, Ethereum Co-founder Vitalik Buterin himself expressed that he is pessimistic about cross-chain applications. Instead, Vitalik argues that the future is multi-chain because of the fundamental limits to the security of bridges.
Portal CEO Eric Martindale claims that these current cross-chain solutions are false “decentralized” DEXs.
The current centralized exchanges, false “decentralized” DEXs, custodially wrapped tokens, and censorable ecosystems all threaten Bitcoin’s promise of self-sovereignty. Fabric technology enables Layer 3 privacy on cross-chain transactions and eliminates the need for centralized custodians.
Instead, Portal aims to build a DEX that embodies Bitcoin’s original intent of self-governance. Martindale says Portal will bring a fast, peer-to-peer, Layer 2 exchange along with the speed of centralized exchange with privacy.