Finance Redefined: Vitalik bearish on cross-chain, dYdX decentralizing, Jan. 7–14
Welcome to the latest edition of Cointelegraph’s decentralized finance newsletter.
Despite the market printing bearish numbers for a second consecutive week, the industry is not short of bullish fundamental news. Read on to hear about the most impactful DeFi stories of the last seven days.
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Vitalik Buterin, a co-founder of Ethereum, shared a candid assessment of the security limitations in implementing fully functional cross-chain bridges within the blockchain industry.
Buterin argued that storing assets on their native chain provides a higher level of security against 51% attacks than cross-chain activities, stating, “It’s always safer to hold Ethereum-native assets on Ethereum or Solana-native assets on Solana than it is to hold Ethereum-native assets on Solana or Solana-native assets on Ethereum.”
My argument for why the future will be *multi-chain*, but it will not be *cross-chain*: there are fundamental limits to the security of bridges that hop across multiple "zones of sovereignty". From https://t.co/3g1GUvuA3A: pic.twitter.com/tEYz8vb59b
Sharing a series of examples to prove his thesis, Buterin noted that if a malicious entity attempted to launch a 51% attack on Ethereum, a transaction undertaken by an innocent party could be censored and/or reverted, but not blocked and not lost.
In the most extreme cases, users’ funds would remain safe even if 99% of the protocol was compromised because nodes would overwhelmingly support the remaining 1% rule-following blocks and, therefore, govern the decision-making.
In contrast, an incident of this kind operating on a
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