Alchemix, Connext adopt xERC20 token standard for bridge security
- Alchemix and Connext say the new token standard will benefit token issuers.
- DeFi bridges suffered exploits that saw over $2 billion stolen in 2022.
- Multichain bridge, which recently announced it was ending operations, is among those to be drained this year.
DeFi protocol Alchemix and cross-chain bridge Connext have partnered in an effort that aims to introduce robust security to crypto bridges.
As announced by Alchemix, the two platforms are working together on a new Ethereum token standard dubbed xERC-20. The platforms revealed the move on Monday.
We’re extremely excited to embrace the #xERC20 token standard that encourages open competition & innovation. Reduced liquidity costs for token issuers + granular security 🙌.@AlchemixFi is the 1st adopter via @ConnextNetwork, with more trailblazers to follow!
— Connext (@ConnextNetwork) July 24, 2023
xERC20 token standard increases DeFi bridge security
Per Alchemix and Connext, the new token standard empowers token issuers in several ways, including in bridge management, setting of mint limits, and allowing certain bridges to access identical token mints.
“It’s a bridge-agnostic public good and requires minimal or no custom work for most ecosystems to support,” Connext noted.
“We’re wholeheartedly embracing xERC20 at Connext because we envision a secure and innovative future for tokens and blockchain communication. As the HTTP of Web3, we’re all about making blockchain apps more user-friendly & minimizing security risks,” the protocol added in details shared on X.
According to the team, projects that deploy the new xERC20 token standard with Connext benefit from increased security against potential DeFi exploits. There’s also 1:1 token transfers between chains with zero slippage.
The integration comes not long after the Multichain Bridge was breached in an attack that saw it lose close to $130 million. The protocol recently announced it was halting operations.
Chainalysis reported that token bridge exploits saw more than $2 billion in crypto assets stolen in 2022. This year has continued to see such vulnerability, with millions siphoned from platforms as the sector grapples with increased hacks.