Cross-Chain Bridges: Lock-and-Mint, Liquidity Pools, and Vulnerability Vectors
An engineering inspection into why cross-chain bridges have suffered billions in smart contract exploits and validator multisig compromises.
How cross-chain communication protocols work, how wrapped tokens differ from native assets, and how native burn-and-mint protocols like Circle CCTP eliminate wrapping risk.
1. Lock-and-Mint vs Liquidity Networks vs Native Burn
Traditional bridges lock native tokens in an Ethereum smart contract and mint synthetic 'wrapped' tokens on the destination chain. If the custody smart contract is exploited, wrapped tokens become worthless.
Modern protocols like Circle CCTP (Cross-Chain Transfer Protocol) burn native USDC on the source chain and mint native USDC directly on the destination chain with zero synthetic wrapping.
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