"When a butterfly flutters its wings in Brazil, it may eventually cause a tornado in Texas." This is a famous metaphor of the "butterfly effect", which vividly reveals that seemingly small changes in the system may bring about unpredictable and huge impacts. However, isn't it the same in the blockchain world? A small security vulnerability may lead to a storm that sweeps the entire network.
Bifrost recently experienced such a "tornado". The treasury of this star project in the Polkadot ecosystem was attacked by hackers not long ago, resulting in the theft of a large number of BNC tokens, which caused panic for a while. Fortunately, the Bifrost team responded calmly and quickly took a series of remedial measures to minimize the losses and stabilize the situation.
In the previous article, we reviewed the whole incident and the response process in detail. After a few days, when the heat of this storm gradually subsided, we began to calm down and reflect. What enlightenment did this storm bring to Bifrost and the entire industry? In what aspects does the project team need to improve? How to avoid similar crises in the future? This is an unforgettable lesson, and it is also an opportunity for everyone to reflect on themselves.
Next, let’s review the entire incident again, sort out the latest developments, and try to give some answers. This is not only related to the future of Bifrost, but also affects the future direction of the blockchain industry. After all, in this ever-changing track, only by being prepared for danger in times of peace and always being vigilant can we ride the wind and waves and move forward with confidence.
The cause of the incident: Multiple vulnerabilities led to a large loss of BNC
At first glance, this security incident seemed to be caused by the accidental leakage of a private key. But when the Bifrost team conducted an in-depth analysis, they found that things were not that simple. The real reason was actually a "perfect storm" formed by the superposition of multiple security vulnerabilities.
1. There is no upper limit on the calling frequency, and the limit is meaningless
The first thing to be affected is a fatal flaw in the script design. The script was originally intended to limit each call to a maximum of 100 BNC as a handling fee to prevent excessive spending. But unfortunately, it does not limit the frequency of calls. This is like a door that is locked but can be opened and closed infinitely. An attacker only needs to write an automated script and call it repeatedly to easily break the 100 BNC limit and steal assets from the treasury at will. This limit is meaningless.
2. The treasury acts as an ATM, allowing attackers to overdraw
Secondly, the Bifrost team found that there were also problems with the payment method of transaction fees. The Bifrost Treasury acted as the payer of transaction fees, which should have been a convenient design. But in this incident, it became an "accomplice". Because the treasury reserves a large amount of BNC, once the attacker gains control of the script, he is equivalent to getting a "wallet pass" that can be overdrawn at will. The Bifrost Treasury has transformed into an ATM for the attacker. The attacker can steal assets in the treasury unscrupulously, and the treasury is powerless to stop it.
3. Multiple signatures are fake, and signatures are forged to deceive inspection
Furthermore, the Bifrost team examined the implementation of multi-signature. Multi-signature is a good security measure. It requires that a transaction must be agreed upon by multiple parties before it can take effect, which can effectively prevent single point failure. However, Bifrost's multi-signature script has a serious design flaw - it only checks the number of signatures, but does not verify the content of the signatures. This is like a "seemingly rigorous" security checkpoint, but in fact it is a fictitious one. The attacker only needs to forge a signature to easily deceive the script check. Multi-signature is useless and loses its original security function.
4. Private keys are stored in plain text, and intrusion means loss
Finally, the Bifrost team revealed a serious problem with private key management. The private key is the core secret of a project, and its security management is crucial. However, Bifrost's private key is stored in plain text on the server. This is undoubtedly a big pit in security. Once the server is hacked, the private key will immediately fall. This is like putting the key under the carpet at the door. As long as someone looks carefully, they can directly open the door and invade the house. The plain text storage of the private key gives attackers an opportunity to take advantage.
It is these seemingly insignificant but interconnected security vulnerabilities that accumulated together and caused this crisis. Bifrost's BNC was almost destroyed in this domino effect. This taught the Bifrost team a vivid security lesson: in the world of blockchain, security must be grasped from the details, and no carelessness is allowed. Otherwise, the consequences will be disastrous.
The Bifrost main chain is as stable as a rock, and the team responded quickly to recover losses
In this incident, it is gratifying that the security and stability of the Bifrost main chain have withstood the test. Although there are loopholes in the off-chain scripts, the assets and codes on the Bifrost main chain are intact. This is due to the fact that the Bifrost main chain has undergone multiple rounds of rigorous audits, and its security and stability can be said to be rock-solid and unbreakable.
However, relying solely on the security of the main chain is not enough. In the world of blockchain, security requires all-round and all-round protection. This incident exposed the weak links of Bifrost in the security of off-chain scripts. Despite the heavy losses, the Bifrost team was not defeated, but responded quickly and took a series of decisive remedial measures to minimize the losses.
1. Lock abnormal funds through governance mechanism
The Bifrost team locked the abnormally flowing BNC through the governance mechanism, preventing a larger outflow of funds. This alone successfully recovered more than 3.4 million BNC. This shows the efficiency and reliability of the Bifrost governance mechanism.
2. Collaborate with Moonbeam to recover cross-chain funds
The Bifrost team actively cooperated with Moonbeam and recovered 710,000 lost BNC from the cross-chain bridge through a proposal. This highlights the Bifrost team's excellent adaptability and negotiation skills. At the same time, it also shows the valuable spirit of the Bifrost community and the Moonbeam community to help each other and overcome difficulties together in difficult times.
3. The team will compensate the treasury losses from its own shares
In order to replenish the treasury's losses as quickly as possible, the Bifrost team generously took out 3.28 million BNC from its own holdings and compensated all of them to the treasury. This move demonstrated the team's loyalty and sense of responsibility to the project and greatly enhanced the community's confidence.
4. Initiate a proposal to buy back BNC with DOT
In order to further consolidate the treasury reserves, the Bifrost team also launched a proposal for DOT to repurchase BNC. Replenishing the treasury reserves through market-oriented means can be said to kill two birds with one stone, stabilizing the price of BNC and injecting fresh blood into the treasury.
In short, with a series of effective response measures taken by the Bifrost team, the loss of the treasury has been fully compensated, and there will be no more abnormal inflow of BNC in the market. This crisis has been completely resolved with the Bifrost team's quick response and proper handling.
Bifrost was able to get out of this crisis not only because of the team's adaptability, but also because of the trust and support of the Bifrost community. Throughout the process, the Bifrost community remained highly rational and calm, and was not overwhelmed by rumors and panic, giving the team trust and time to deal with the problem. This united community power is undoubtedly Bifrost's most valuable asset.
This crisis is both a severe test and a valuable lesson for Bifrost. It exposed the shortcomings of Bifrost's security system, but it also brought together the consensus of the community and strengthened the team's determination. I believe that after this ordeal, Bifrost will become stronger, and its security defense system will be more complete and stable. A project that has experienced great ups and downs is often more trustworthy and expected.
Bifrost comprehensively upgrades security protection
For the Bifrost team, this crisis is not only a test, but also an opportunity to learn and grow. They deeply realize that it is far from enough to just make up for the immediate losses. They also need to find out the root cause of the problem and take measures to improve it in order to truly improve the security and robustness of the project.
Therefore, the Bifrost team started a comprehensive security system upgrade. They started from multiple dimensions and thoroughly reviewed and improved the existing security measures.
1. Comprehensive review of off-chain code
The team conducted a comprehensive review of all off-chain codes. They carefully checked every line of code to find possible vulnerabilities and hidden dangers. At the same time, they were also thinking about how to reduce the dependence on off-chain services as much as possible. Because the off-chain environment is always more vulnerable to attacks than the on-chain environment. Therefore, they decided to move more business logic to the chain and use the immutability and distributed consensus mechanism of the blockchain to improve the security of the system.
2. Improve the payment method of handling fees
The team realized that using large addresses as the source of transaction fees is a huge security risk. This is because it will give attackers an opportunity to empty the treasury by repeatedly calling scripts. Therefore, they decided to use multiple small external addresses to pay for the fees, and set a reasonable amount limit and frequency limit. This can not only meet business needs, but also effectively control risks.
3. Strengthen private key management and multi-signature
The team set out to improve the way private keys are managed. They abandoned the practice of storing private keys in plain text on the server and switched to encrypted storage. At the same time, they also optimized the multi-signature process, not only verifying the number of signatures, but also checking whether the content of the signature is legal. This can prevent attackers from forging signatures and improve the security of multi-signatures.
4. Establish an off-chain script monitoring and early warning system
The team realized that it is not enough to just protect the security on the chain, and it is also necessary to extend the tentacles of security monitoring to the off-chain scripts. Therefore, they established a complete monitoring and early warning system to monitor the operation status of the off-chain scripts in real time. Once an abnormality is found, the system will immediately issue an alarm and notify the relevant personnel to deal with it in time. In this way, there will be no blind spots in security, making the protection of the entire system more stringent.
This series of security upgrade measures are closely linked, starting from code, private keys, multi-signatures, monitoring and other aspects, to comprehensively enhance Bifrost's security defense capabilities.
By learning from this crisis, the Bifrost team found the root cause of the problem, and made targeted improvements. After this incident, Bifrost's security system will be more mature and complete, and the project will become more powerful and robust. Although this crisis brought losses, it also provided valuable experience and inspiration for Bifrost's growth.
In conclusion:
Although this incident caused some losses to Bifrost, it also showed us the power of the community. When Bifrost was in the most difficult time, Moonbeam lent a hand and helped Bifrost recover some of its losses. The Bifrost team also went all out and took out a large amount of BNC from its own holdings to compensate the treasury. This spirit of unity and cooperation shows us the cohesion and centripetal force of the Bifrost community.
What is even more touching is that the majority of community members did not get caught up in rumors and panic, but rationally supported the project and gave the team the greatest trust and support. In the most difficult moments of the project, the rationality and trust of community members are undoubtedly the most valuable assets. This makes us feel the warmth of the Bifrost family, and this strength will become an inexhaustible driving force for Bifrost to move forward.
The vitality of a project does not lie in never encountering difficulties, but in being able to stand up again after encountering difficulties. Through this incident, Bifrost exposed its shortcomings in security protection, but also because of this, Bifrost has a direction for improvement and enhancement. I believe that after this comprehensive upgrade, Bifrost's security protection system will be more complete and the project will develop more healthily.
Lao Mao (Twitter): https://x.com/readonlm
Bifrost related links:
Website：https://bifrost.finance
Twitter：https://twitter.com/Bifrost
Dapp：https://app.bifrost.io