BCGAME - Free 5BTC Daily Bonus!Launched in August 2020, Poly Network is a cross-chain protocol that enhances interoperability between homogeneous and heterogeneous blockchains. The network focuses on fixing on-chain data issues involving transactions, security, and trust. From there, it has developed its cross-chain system to be efficient and easy to use.
In this article, we will discuss:
What is Poly Network?
Layer one blockchains are often isolated networks, making it difficult for users and developers to move their assets from one chain to another. For example, information sharing does not happen on large blockchains like Bitcoin (BTC) and Ethereum (ETH). Projects like the Poly Network, which adopt cross-chain technology, can enable interoperability, making it possible for different platforms to communicate in the crypto world.
Poly Network is a cross-chain decentralized finance (DeFi) platform that allows users to transfer coins across multiple blockchains, such as BSC, Ethereum, and NEO. Furthermore, it seeks to realize effective interoperation, where resources and applications flow freely between chains. To achieve this, it leverages its smart contracts and functional modules for cross-chain communication.
Poly Network does not issue its own token. Instead, it connects platforms by reacting and interacting with participating relays, Poly Chain nodes, and cross-chain based smart contracts.
Poly Chain Consortium Blockchain
Poly Chain coordinates the entire structure by managing the registration, amendment and cancellation of participating blockchains. It is a blockchain consortium, which means it is semi-private. Resource sharing is enabled where members can share solutions with the rest of the network members, thus reducing costs.
However, the semi-private nature of the network also comes with some security limitations. For one, Poly Network uses a Byzantine Fault Tolerant (BFT) consensus to prevent forks and prevents other chains from tampering with its governance model. Furthermore, Poly Chain is forced to run a full node on all participating chains before validating cross-chain transactions. Thus, the network performs thorough verification and can reject illegal transactions.
Poly Network Smart Contracts
Poly Network has a set of smart contracts that act as a bridge between blockchains. As users transfer their assets across the network, the smart contracts automatically burn or mint the equivalent assets on different blockchains. For example, on Poly Network, a smart contract uses “holders” to verify and execute transactions on the source chain. Once the transactions are verified, a second smart contract verifies that the holder’s signature is valid and executes an equivalent transaction on the destination chain.
Poly Network Relayers
Relays perform read and write operations to validate the data.
- A “write” operation affects the state of the target chain. For example, a write operation occurs during the release of assets between chains, as block chains need to register the transfer.
- A “read” operation returns the status of the target string. For example, a read operation occurs when a user wants to know their account balance.
Thus, relayers operate simultaneously and function correctly only when both blockchains validate the transaction. In addition, the transaction initiator bears the costs of running nodes and relay operations to perform the service.
What does Poly Network offer?
The main function of the Poly Network is to successfully connect blockchains to enable transaction validation at the receiving end of the chain. As a result, the Poly Network helps digital assets flow freely, promoting cryptocurrency-related exchanges, payments, asset investments and financing across the chain. Users can freely move tokens between chains while retaining ownership, or make a payment on chain A for assets on chain B.
Users can also enjoy cross-chain functions. Security is enhanced as blocking is executed across multiple threads of execution to control cross-chain business workflow.
Cross-chain transactions: Organizations participating in the Poly Network allow sharing of resources on other platforms. Shared resources are beneficial for users as they have more options to transact on a different blockchain (with variable transaction fees). For example, through Poly Network's PolyBridge, users can easily exchange tokens such as USDC , UNI and MATIC , among various blockchains such as Ethereum and Neo.
Cross-chain NFT transfer: PolyBridge also offers the world's first non-fungible token cross-chain (NFT ) transfer bridge, enabling cross-chain compatibility of NFTs. As a result, it can be used to access cross-chain NFT mining and trade, requiring only low transaction fees. In addition, trading and burning NFTs on multiple blockchains increases market liquidity. For now, Poly Network can act as a cross-chain interoperability protocol for NFT projects interested in cross-chain transfer to users.
Cross Chain DApps: PolyBridge allows developers to easily build functionality into their smart contracts because it's already connected to other blockchains like Neo and Ethereum. Poly Network provides infrastructure for developers to build decentralized cross-chain applications ( DApp s ) that are compatible with their respective platforms.
Who is behind Poly Network?
The Poly Network was launched as a collaborative effort by the major interoperability projects Ontology ( ONT ), Neo (NEO) and Switcheo. These strategic partners work together to build technology for the decentralized blockchain network.
Ontology co-founder and spokesperson Andy Ji served as a director at Hyperledger and deputy director of the China Blockchain Ecosystem Alliance (CBEA). Earlier in his career, he worked at a bank as a project manager for platform architecture design and was involved in blockchain research. Additionally, he has worked in management roles at two different companies responsible for smart contracts and blockchain technology. Prior to Ontology, he served as a blockchain expert for blockchain initiatives at Dalian Wanda Group.
Neo co-founder and spokesperson Da Hongfei is a notable entrepreneur in China’s cryptocurrency and blockchain industry. He has advised officials on cryptocurrency and ICO exchange bans. Aiming to outperform Bitcoin, he developed NEO, which surpassed Ethereum in transaction speed with its BFT consensus algorithm.
Switcheo CEO and co-founder Ivan Poon holds a BA in Computer Engineering from the National University of Singapore. Previously, he worked as Chief Technology Officer (CTO) for two companies in the computer software field.
The Poly Network Hack
On August 10, 2021, a hacker stole $600 million dollars worth of Poly Network cryptocurrencies in different blockchains. The hacker attempted to carry out additional transactions with the stolen funds, which were rejected via an Ethereum address.
A report from a security firm reveals that the hack was made possible through a private key leak in the Poly Network’s signing process. The hacker was converting the tokens across several major blockchains, including Ethereum. The Poly Network subsystem had a vulnerability through which hackers could spoof interactions between blockchains for transactions. This was identified as a rudimentary bug, suggesting that the security is not entirely robust.
This hack has raised concerns about Poly Network's security as users of major platforms are affected. Trusted bridges are vulnerable to these exploits. Consequently, experts encourage security audits to be performed by users. However, auditing may not be easy for platforms without permission, such as decentralized exchanges ( DEXs ) based on automated market makers ( based on AMM ), because theoretically they serve all users connected to the Internet. Tools like open source can be used for auditing and intelligent contract verification. With DeFi, users are advised to maintain security procedures through auditing as the ecosystem is becoming more diverse as it is updated.
Since the attack, the stolen funds have been transferred back to Poly Network. The hacker claimed he was simply teaching Poly Network a lesson about security. However, analysts speculate that the reason for the return of the funds may be due to the difficulties associated with laundering such a large sum without being traced.
What is the future of Poly Network?
Poly Network has shared its roadmap for post-hack recovery and is currently in phase three – restoring cross-chain service for projects associated with Poly Network. Before the Poly Network is up and running again, it must complete the remaining two phases of asset recovery and service restoration.
The team is currently outsourcing help to fix Poly Network’s security issues. On August 17, the team partnered with Immunefi to launch a bug bounty program for further security testing on a larger scale. External audits and security alliances were also contacted to examine potential vulnerabilities with the current protocol code. Other crypto security organizations also conducted an informal investigation into the Poly Network hack, concluding that a hacker had modified the Ethereum chain’s contract and header. Poly Network even invited the white hat hacker to become their security consultant, although this offer was rejected.
Conclusion
As a cross-chain interoperability solution, Poly Network provides functionality based on collaboration from leading blockchain platforms. Unfortunately, network security has struggled to keep up with its rapid development. Despite benefits such as fast speeds and low cost, safety should be the highest priority of all projects. Poly Network learned a difficult lesson and it remains to be seen whether the platform can regain its reputation.
