Security remains a paramount concern in Web3, especially in the wake of numerous bridge hacks accounting for a staggering 70% of cyberattacks in the domain. The resulting financial vulnerabilities have led to losses amounting to over $2.66 billion.
Orderly Network is reimagining asset security in DeFi trading, implementing an all-encompassing security strategy that stands out in the blockchain world. This blog post delves into Orderly’s holistic security measures, highlighting how we are shaping asset protection in crypto trading.
Bridge-based solutions are the most common way to enable cross-chain trading. They work by locking the original funds on one chain and issuing wrapped tokens on another chain. For example, if you want to trade ETH on Binance Smart Chain, you would lock your ETH on Ethereum and receive WETH on BSC.
However, this process introduces several security risks and financial vulnerabilities. First, you have to trust the bridge contract and its operators to securely lock and unlock your funds. If the bridge contract is compromised or malicious, you could lose your funds or face delays in withdrawals.
Second, you have to deal with the risks of wrapped tokens. Wrapped tokens are not the same as the original assets. They are subject to different market dynamics, liquidity issues, and price fluctuations. Moreover, they may not be fully backed by the original assets, creating a risk of undercollateralization or insolvency.
Third, you have to deal with the risks of cross-chain communication. Bridge-based solutions heavily rely on external oracles or relayers to transmit information between different blockchains. These intermediaries may be unreliable, inaccurate, or dishonest, leading to data corruption or manipulation.
Orderly has reimagined the concept of asset protection in DeFi trading by eliminating the need for bridges and wrapped assets, which have been synonymous with increased security risks. Instead, users can securely deposit their funds into our pre-deployed on-chain vaults on their chosen blockchain. This approach ensures that the funds remain as native assets, while only secure messages, powered by LayerZero Labs, are transferred. This method significantly reduces the risks associated with traditional bridges and wrapped asset methods, providing users with a much safer trading environment.
At the core of Orderly’s security framework is the principle of user autonomy. Only users themselves can access their funds in these on-chain vaults. Withdrawals require a signature authenticated by the wallet’s private key, verified through smart contracts. This mechanism ensures that only the legitimate owner can access and manage their assets, adding an extra layer of security against unauthorized access and potential cyber threats.
Orderly takes transaction authenticity to the next level. All orders on the platform are signed using the user’s Orderly key, akin to a trading key. This method guarantees the legitimacy of all orders and fund settlements between traders. The trading keys, which require wallet private keys for activation, function as session keys, making it virtually impossible to fake signatures. This system not only enhances the integrity of transactions but also bolsters user confidence in the platform’s reliability.
Orderly’s commitment to security is further reinforced by our rigorous auditing processes. All smart contract code powering Orderly’s infrastructure undergoes double auditing by leading audit firms. These comprehensive audits are publicly accessible, providing transparency and reassurance about the platform’s security measures.
Users and investors can review these audits, available on Orderly’s Github — a testament to upholding our transparency standards and understanding the depth and thoroughness of the security protocols in place.
Orderly stands as an exceptionally secure trading infrastructure in the Web3 space. By eliminating the necessity for wrapped assets and bridges, Orderly significantly provides an infrastructure that diminishes the associated risks. Coupled with rigorous, double-audited smart contract code, Orderly represents a haven of safety and reliability for users, traders, and builders.
As the blockchain ecosystem continues to grow and evolve, Orderly’s innovative approach to security sets a new benchmark, ensuring that users can trade and builders can build with absolute confidence.