LiFi Debuts Multi-Bridge Governance Solution following Uniswap Controversy

The renowned multichain bridging protocol, LiFi, has recently launched a revolutionary multi-message aggregator designed specifically for decentralized autonomous organization (DAO) governance. According to LiFi’s research lead, Arjun Chand, this new aggregator has the potential to prevent governance attacks that usually originate from cross-chain bridges. By implementing this technology, decentralized exchanges, lending apps, and other Web3 protocols can ensure robust security and enhanced governance mechanisms.

A Solution to Bridge Security Challenges

The launch of the LiFi multi-message aggregator comes after a heated debate over bridge security occurred on the Uniswap forums in late January and early February. In this discussion, it was concluded that no single bridge possessed all the necessary security features to ensure secure governance.

Uniswap, the prominent crypto exchange, operates under the governance of a DAO called UniswapDAO. In January, UniswapDAO began contemplating the deployment of a second copy of Uniswap to the BNB Smart Chain (BSC). This raised concerns regarding how Uniswap would be governed across different chains, given that all previous votes were conducted exclusively on the Ethereum network. On January 24, the DAO reached the decision to deploy a second copy of Uniswap to the BSC and utilize the bridging protocol Celer to send messages from BSC to Ethereum.

However, controversy arose immediately following this proposal due to doubts about the security of the Celer Bridge in preventing cross-chain governance attacks. Some participants in the DAO expressed reservations and recommended alternative bridge solutions such as Wormhole, LayerZero, or DeBridge. Conversely, other participants defended the selection of Celer Bridge.

On January 31, a second vote was held to determine the bridge that would be used for governance. Ultimately, Wormhole emerged as the winner and became the official bridge for governance purposes.

Although Wormhole was chosen, the vote remained contentious, as only 62% of Uniswap (UNI) tokens were used to cast “yes” votes. This was in contrast to previous UniswapDAO proposals where votes were either overwhelmingly in favor or against the proposal.

Embracing a Multi-Bridge Approach

Prior to the vote, the prevailing sentiment among participants was that Uniswap should utilize multiple bridges instead of relying on a single one. This approach would safeguard against potential hacks, as other bridges would reject any malicious messages transmitted through a compromised bridge. However, at that time, there was no suitable multi-bridge solution available. Consequently, the supporters of the proposal argued in favor of using Wormhole until a purpose-built multi-bridge solution could be developed.

In response to these concerns, LiFi has introduced its bridge aggregator, which offers a future-proof and versatile solution for various cross-chain messaging requirements. Using LiFi, protocols can now demand that votes be confirmed on at least two out of three bridges to ensure their validity. This means that even if one bridge records a “yes” vote, but the other two bridges register a “no,” the “no” vote will be confirmed. The aggregator can also be configured to require confirmation from three out of five bridges or any other ratio determined by the DAO.

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LiFi bridge aggregator design diagram. Source: LiFi

LiFi is not the only team working on a multi-bridge aggregator for DAO governance. Gnosis has also developed a similar protocol called “Hashi,” although it has not yet been deemed production-ready and lacks audits and bug bounties according to a UniswapDAO committee. Meanwhile, LiFi’s aggregator is due to undergo testing and will be sent for an audit by Trail of Bits in the near future, as stated in Chand’s announcement.

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