InterDAO Link: BridgeGuard

Martin Walker
Aug 20, 2023 at 03:47 pm

The LiFi research team has introduced an innovative bridging mechanism within the realm of decentralized autonomous organization (DAO) governance, as per a statement made on August 17 by Arjun Chand, the head of LiFi's research endeavors. If embraced by decentralized exchanges, lending platforms, and other Web3 protocols, this novel aggregator aims to thwart governance breaches stemming from inter-chain connections, according to the relevant documentation.

This announcement follows an extensive discourse surrounding bridge security on the Uniswap forums during late January and the early days of February. The consensus reached was that no individual bridge possesses the complete set of security attributes imperative for safeguarding governance integrity.

A DAO dubbed UniswapDAO administers the operations of the cryptocurrency exchange Uniswap. In January, UniswapDAO initiated discussions about duplicating Uniswap on the BNB Smart Chain (BSC). This raised inquiries about governance across multiple chains, as all prior votes were confined to the Ethereum network. On January 24, the DAO resolved to replicate Uniswap on BSC and utilize the Celer bridging protocol to transmit communications from BSC to Ethereum.

Although this proposition gained approval, a dispute erupted swiftly over the selection of the Celer Bridge for communication purposes. Some DAO members harbored reservations about Celer's security capabilities against cross-chain governance breaches. Alternately, they suggested considering Wormhole, LayerZero, or DeBridge. Others stood by Celer as the appropriate choice.

On January 31, a second vote was held within the DAO to decide the preferred bridge for governance. Wormhole secured victory and was designated as the official conduit for governance matters. Yet, the outcome was contested, with only 62% of Uniswap tokens employed for affirmative voting. In contrast, various UniswapDAO proposals garnered nearly unanimous support or opposition.

Cross-chain governance proposal by UniswapDAO. Reference: Uniswap.Cross-chain governance proposal by UniswapDAO. Reference: Uniswap.  

During the pre-vote deliberations, numerous participants concurred that Uniswap should adopt a multi-bridge strategy, mitigating risks associated with a single bridge. This strategy would have disparate bridges reject malevolent messages from a compromised bridge, thwarting potential attacks. However, such a multi-bridge solution was lacking at the time. Therefore, supporters of the proposal advocated for Wormhole's utilization until a comprehensive multi-bridge alternative could be devised.

In the August 18 update from LiFi, Chand asserted that the newly developed bridge aggregator by his team furnishes a "future-proof remedy for diverse inter-chain messaging requisites," obviating the need for future protocols to rely solely on a solitary bridge for governance messages.

The aggregator's documentation elaborates that protocols can impose a prerequisite for votes to be validated by at least two out of three bridges. To illustrate, if one bridge registers a "yes" vote from a DAO token holder, while two other bridges record "no" votes, the "no" vote will prevail. Furthermore, the aggregator's settings can be adjusted to necessitate validation from three out of five bridges, or any other configuration that the DAO prefers.

Design schematic of the LiFi bridge aggregator. Reference: LiFi.Design schematic of the LiFi bridge aggregator. Reference: LiFi.  

LiFi is not the sole entity that has formulated a multi-bridge aggregator for DAO governance. In March, Gnosis introduced a parallel protocol named "Hashi." However, a committee within UniswapDAO proclaimed in June that Hashi was still in an experimental phase, pending audits, and without a bug bounty system. Hence, the committee deemed it unsuitable for overseeing DAO governance.

Similarly, the LiFi aggregator has yet to undergo an audit. Chand affirmed in his announcement that plans include a comprehensive testing expansion, followed by an audit conducted by Trail of Bits.

Related News

Sign up for daily crypto news in your inbox

Get crypto analysis, news and updates right to your inbox! Sign up here so you don't miss a single newsletter.