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- CCIP Chainlink reportedly achieved the fifth level of cross-chain security by using multiple levels of decentralization.
- According to a blog post, there are five levels of cross-chain security, and the levels determine its strength.
A massive revolution swept the crypto industry with the likes of Bitcoin, Ethereum, Ripple, etc. contributing greatly to the cross-border payment ecosystem. However, several bridge hacking incidents affected their adoption. According to reports, cross-chain exploits undermine Web3’s efforts to create a robust economy. The easiest way to avoid this is to move away from centralized bridges and single networks. Instead, payment projects are advised to use a deep defense cross-chain solution that has multiple layers of “decentralization and on-chain risk management.”
In a post by Chainlink, five levels of cross-chain security are highlighted. In addition, the benefits of CCIP setting a new industry standard in cross-chain communication were also stated.
Hundreds of millions will continue to be lost to hacks—unless the blockchain ecosystem levels up its cross-chain infrastructure.#Chainlink CCIP is the new standard in cross-chain security, with unprecedented levels of decentralization & risk management.https://t.co/3XUEx4jNO8
— Chainlink (@chainlink) September 26, 2023
The first level of cross-chain security highlighted is the use of a single server secured with a single private key by a single entity. According to the blog post, this architecture creates a critical attack vector that leads to conflicts of interest. This of course puts user funds at risk. The second level of security is the decentralization theory. According to Chainlink, this occurs when a protocol creates the impression of decentralization when it is not. The case of Multichain has been cited.
Despite their previous assurances of decentralization, the Multichain team revealed that the multi-party computing servers and private keys of the protocol were all under the exclusive control of [Multichain CEO] Zhaojun, who was handed over to the police. Without access to these items, the protocol had to be shut down, and members of his team could not be located.
CCIP Chainlink Uses the Fifth Level of Security
The third layer of security is the One Monolithic Network. This is a single decentralized network consisting of independent node operators with unique private keys and appears to be an improvement over the first two layers. Unfortunately, this network cannot support cross-chain economies that have very large transaction volumes.
The fourth is the Dual Decentralized Network. According to the report, Chainlink Services has been operating at this level for three years. So far it has enabled a transaction value of 8.5 trillion dollars. However, there is a need for additional risk management techniques as a result of the complexity of cross-chain transfers. The last level of security is Defense-In-Depth. It achieves an unprecedented level of decentralization. It utilizes multiple independent nodes including independent key holders.
According to Chainlink, the adoption of CCIP will provide multiple independent nodes run by independent keyholders and several other advantages. It is important to note that CCIP is the only cross-chain solution that provides cross-chain token transfers with complete level five security. According to Chainlink, CCIP features Committing DON, Risk Management Network, and Execution DON.
Chainlink CCIP gives Web3 protocols and financial institutions access to cross-chain interoperability with level-5 security. That’s why leading institutions like Swift, DTCC, and ANZ, along with major DeFi protocols like Aave and Synthetix, have teamed up with CCIP to explore and enable cross-chain use cases. Backed by unparalleled levels of security and decentralization, CCIP is positioned to become the universal interoperability standard between public and private blockchains.
