Hedge Funds on a Swamp: Analyzing Patterns, Vulnerabilities, and Defense Measures in Blockchain Bridges

• URL: http://arxiv.org/abs/2507.06156v3
• Date: Mon, 21 Jul 2025 15:10:06 GMT
• Title: Hedge Funds on a Swamp: Analyzing Patterns, Vulnerabilities, and Defense Measures in Blockchain Bridges
• Authors: Poupak Azad, Jiahua Xu, Yebo Feng, Preston Strowbridge, Cuneyt Akcora,
• Abstract summary: bridges have become essential infrastructure for enabling interoperability across different blockchain networks.<n>They are the single largest source of financial loss in Web3.<n>We present a comprehensive systematization of blockchain bridge design and security.
• Score: 5.662299435213421
• License: http://arxiv.org/licenses/nonexclusive-distrib/1.0/
• Abstract: Blockchain bridges have become essential infrastructure for enabling interoperability across different blockchain networks, with more than $24B monthly bridge transaction volume. However, their growing adoption has been accompanied by a disproportionate rise in security breaches, making them the single largest source of financial loss in Web3. For cross-chain ecosystems to be robust and sustainable, it is essential to understand and address these vulnerabilities. In this study, we present a comprehensive systematization of blockchain bridge design and security. We define three bridge security priors, formalize the architectural structure of 13 prominent bridges, and identify 23 attack vectors grounded in real-world blockchain exploits. Using this foundation, we evaluate 43 representative attack scenarios and introduce a layered threat model that captures security failures across source chain, off-chain, and destination chain components. Our analysis at the static code and transaction network levels reveals recurring design flaws, particularly in access control, validator trust assumptions, and verification logic, and identifies key patterns in adversarial behavior based on transaction-level traces. To support future development, we propose a decision framework for bridge architecture design, along with defense mechanisms such as layered validation and circuit breakers. This work provides a data-driven foundation for evaluating bridge security and lays the groundwork for standardizing resilient cross-chain infrastructure.

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