Protocol for Layer 2 Interoperability In cooperation with Across, Celer Network, ChainSafe, Sygma, LI.FI, Socket, Router Protocol, and the Cross-chain Interoperability Alliance, Connext has demanded the creation of open bridge standards. Concerning LayerZero’s recent actions—deploying wstETH to Avalanche, BNB Chain, and Scroll—without Lido DAO’s approval, the project voiced its concerns. The collective feels that:
1) Vendor-locked proprietary standards aren’t real standards. Despite being advertised as standards, OFT and other vendor-specific technologies are actually owned by the cross-chain bridges that use them. They impose vendor lock-in, which makes it practically hard for projects to fix security problems, iterate on preferences, or permanently move to an alternative.
2) Systemic dangers are introduced by lock-in. The security model of the issuing bridge is irreversibly linked to tokens issued by proprietary standards. Lock-in makes it more difficult to improve security iterations and exposes projects to unquantifiable systemic dangers. These systemic concerns have resulted in cross-chain bridge hacker assaults valued at over $2 billion over the last two years.
3)The owners of tokens ought to be the token issuers. DAOs that issue tokens ought to be the final judges of whether versions of their assets are canonical on particular chains. If there is no consensus among DAO-led social consensus over the canonical representation of a given asset, fragmentation is propelled by the issuance of several non-fungible representations.
4) Open standards that are provider-agnostic promote constructive competition. Token issuers can use canonical representations in line with point 3 while avoiding lock-in as per point 2, thanks to open public standards like ElP-7281 (xERC20), which rewrite the incentive structure around token bridging security. Bridging suppliers compete openly and continuously on security, uptime, and cost thanks to standards. In the end, this helps users by promoting ongoing innovation in safe bridging techniques.