My fellow retards,
Dig if you will a picture, you sitting on top of the world.
You have thousands of users playing around with your cutely-named project called wormhole. You figured a way to port assets between two blockchains. You told everyone Ethereum is great, but they should utilize Ethereum-based assets on Solana because muh scalability. You completely ignore the composability issues inherent with having L1 native assets existing on the same chain, but your users are too dumb to realize anyway.
You amass hundreds of millions of dollars in value “secured” in your contracts on both chains. You let people to lock up value on Ethereum, and you create a representation on Solana so that they can use a scalable and fast blockchain…Don’t mention how often Solana is down because it is a big-ass centralized server farm, but that’s not the point…
You sell them the dream of using crypto assets at near-zero fees. Most importantly, you don’t disclose shit to them about how their risk profile changes when you place native L1 assets into a different realm.
Vitalik wrote this post like a month ago about the inherent risks of using these bridges. Unsurprising, his conclusions are completely correct—though anyone who can actually think through the process of bridging networks can figure how risks exponentiate as you increase the attack surface of your crypto.
When you bridge from Ethereum to a L2 or to another chain, you’re no longer relying solely on the security design of Ethereum. Now you’re also exposing yourself to the complete attack surface of that L2 or other chain. In the case of Solana, the contract that allowed minting of Ethereum-based representations had a faulty signature check. This allowed an attacker to create 120k fake Ether represented in Solana land as a receipt, port that receipt back to Ethereum via the wormhole and drain the entire contract.
All of these bridges and L2 designs are risky as fuck. They are massive honey pots by design. The pitch is “store your assets in this here location, and we’ll represent them somewhere else with different tradeoffs from base chain Ethereum”. They typically don’t say trade offs, instead they say, we’ll give you a faster and cheaper way to use your coinz. They never say; “we’ll also increase your risk profile massively to the point where you can lose everything if we fuck up just a little”.
Anyway, these fucking bridges and L2…They are sold as a scaling panacea. Anyone who is even semi-long in the crypto-tooth knows that these fuckers get hacked or have vulnerabilities exploited all the fucking time. Their design throws up a big sign to the nefarious black hats out there saying “hey you, we’ve amassed $100m+ in value in this one contract, it’s yours if you can claim it”.
The entire crypto ecosystem (almost) has focused on the complete wrong direction in order to scale and connect these networks. All these clowns want to go up the stack…build an L2 or bridge that gives greater speed and lower cost. Every attempt at this increases the risk to your crypto assets’ security. The community is either going to get much smarter about scalability or much poorer. Phonon is the smarter path.
The Phonon network also promises scalability, and the ability to transact across chains. No, there is no honey pot. There is no global contract to store funds that exist on the phonon network. That’s because Phonon isn’t designed by unimaginative tools who do not care when they lose hundreds of millions of their customers’ or investors wealth.
Phonon scales by going below these networks, through the transfer of private keys within a secure hardware topology. To create a phonon, you have a smartcard generate an keypair within its secure hardware. The private key cannot leave that smart card. You as the user never get to know it. You have that keypair give you a public address. You can now send your L1 asset to that address. Now that private key has value encumbered upon it, which could be for any L1 or L2 or whatever else develops—so long as the relevant curve is supported.
To transfer value, two pieces of secure hardware connect, handshake, and the private key is atomically transferred. You can also do swaps here, any supported asset for any other...Congratulations, you now realize you can have a fully hardware-secured cross-chain dex that can swap actual private keys atomically, p2p. No transactions are broadcast, you get perfect privacy and scalability. Transfers take about a second each, and the throughput is limited only by the number of compatible hardware devices in existence. In other words, Phonon scales with its user base. It is only limited by the internet, not by complex proof of work or communist voting on transaction validity. All of that complexity is pushed to the cards.
So why is a Phonon DEX a better solution in light of the abject failure in the wormhole exploit? Well, in the phonon context, it is not unlikely that a blackhat could steal the funds, it is *impossible* by design. There are no honeypots. All that exists are private keys secured on hardware, passing through encrypted tunnels. This is the type of design the community should be moving towards. Flee the donkey/globohomo L2/bridge networks and venture into the dwarf-built crypto tunnels of Phonon!
Join PHONON DAO Discord and take the first steps forward. Tell them phon/ongod sent you.
Don’t forget; $1b marketcap by Q2 2022, $12b by EOY.