Crypto Bridges May Cause Next FTX-Scale Collapse Warns Komodo Executive

TLDR

• Over $2.8 billion has been stolen in bridge-related exploits across Web3.
• Bridge exploits make up nearly 40% of total funds stolen in Web3 history.
• Wrapped assets depend on centralized control, exposing DeFi to high risk.
• Failures in bridge systems can disrupt lending, liquidity and trading markets

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The crypto industry is facing growing scrutiny over cross-chain bridges, which have emerged as potential systemic threats. With around 40% of all stolen Web3 funds tied to bridge exploits, experts are warning that these platforms may lead to the next major collapse—similar in scale to FTX.

Bridge Exploits Account for Billions in Losses

Cross-chain bridges have facilitated token transfers across different blockchains using wrapped assets. However, these bridges have also become primary targets for hacks. Komodo Platform CTO Kadan Stadelmann stated that bridge-related exploits have led to the theft of over $2.8 billion in crypto assets to date.

According to the article published on Cointelegraph, these hacks represent approximately 40% of all funds stolen in the Web3 ecosystem. High-profile events, such as the Ronin bridge hack, have exposed the vulnerabilities of bridge infrastructure. Despite repeated incidents, bridge usage has continued to grow, raising concern over the crypto industry’s response.

Stadelmann emphasized that these exploits were not isolated events but part of a broader pattern. “These aren’t freak accidents; they’re the predictable result of trusting centralized choke points,” he said.

Centralized Control Behind Wrapped Assets

Wrapped assets are digital tokens pegged to the value of assets like Bitcoin or Ether but used on non-native chains. To maintain the value of these tokens, bridges use multisignature wallets or custodians, creating centralized control points.

While these mechanisms help connect different blockchains, they expose users to risks when validators or custodians are compromised. If one key or validator is attacked, the wrapped tokens can lose all value instantly. These wrapped assets often serve as the foundation for lending platforms and liquidity pools across the DeFi ecosystem.

“Wrapped BTC and ETH are treated like real assets,” the article noted. “But behind the scenes, they’re IOUs backed by a fragile set of actors.”

Cascading Failures Across DeFi Protocols

A failure in a major bridge system can trigger widespread disruption in DeFi markets. When bridges fail, protocols that rely on wrapped tokens experience liquidity shortages. Lending protocols may face forced liquidations, while trading volumes decline sharply.

The article warned that such a failure during peak market conditions could replicate the crisis caused by the collapse of FTX in 2022. Since bridges are deeply integrated into liquidity systems, any breakdown may affect a broad range of users and institutions.

Stadelmann pointed out that previous bridge collapses should have served as a wake-up call. Yet, many projects chose to prioritize user growth and fast integration over long-term infrastructure security.

Call for Native Trading and Trust-Minimized Solutions

The author recommends native trading as a safer alternative. Native trading refers to direct transfers between blockchains using trust-minimized tools like atomic swaps. These methods reduce reliance on wrapped assets or centralized validators and allow users to retain custody of their funds.

Although native trading has technical challenges, such as limited liquidity and complex user interfaces, the article suggests that it offers a more secure foundation. Tools like hash time-locked contracts have existed for years but have seen limited adoption.

The author concludes that continuing to rely on bridge-based models may attract strict regulatory scrutiny or cause users to lose confidence in DeFi altogether. A shift to resilient, decentralized infrastructure is being urged across the ecosystem.

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