Shared Security for Interconnected Blockchains

A legitimate threat to smaller blockchains is the ability of an attacker to aggregate 51% of the staking tokens and use their majority position to engage in malicious behavior. The incentive to engage in this type of attack is particularly strong when the chain has a substantial amount of bridged assets parked. An attacker takes a majority position and has the potential to extract all parked tokens. Vitalik Buterin, co-founder of Ethereum, explains the relative risks and offers some mitigation tactics in a recent Reddit post. One approach to defending against this type of attack is shared security, where a larger blockchain lends its validators to the smaller chain.

Cosmos Hub is the first blockchain of Cosmos, a project that plans a set of interconnected blockchains. Cosmos has just introduced its own shared security model called Interchain Security.

How Does Interchain Security Work?

In an interview with The New Stack, Billy Rennekamp, Cosmos Hub Lead at the Interchain Foundation, explained how this shared security model works. “This first iteration, v1 Interchain Security, is a full validator set replication where a provider chain, like the Cosmos Hub, sets the bar for security across all the networks that receive the validator set. We call these consumer chains. Consumer chains consume the security and the validator set of the provider chain, in this instance the Cosmos Hub.”

There’s a roadmap to extend this validator replication to independent blockchains with their own validators, market cap, and security guarantee, by layering the provider chain’s validator set on top. “That means compounding the security,” explained Rennekamp, “because it’s now the market cap of your consumer chain staking token, plus the market cap of the provider chain staking token.”

Benefits of Interchain Security for Developers

Cosmos has taken an interesting approach to Web3 development. Instead of building a decentralized application on Ethereum or one of the Layer 2 sidechains, Cosmos envisions a world where you establish your own application-specific blockchain, engaging with applications or services on other chains through its Inter-Blockchain Communication (IBC) protocol.

In a recent episode of The New Stack Makers podcast, Marko Baricevic, a software engineer for the Interchain Foundation, likened IBC to the role TCP/IP plays as a communication protocol for networks. Much like TCP/IP established a common protocol used for networked computers to send and receive information, IBC establishes a means of sending and receiving messages between blockchains.

Rennekamp describes the distinction in approach as horizontal vs. vertical scaling of blockchains. “We often talk about scaling blockchains vertically,” he said, “[and] trying to fit as many transactions as possible into the block. There’s another under-explored concept of horizontal scalability, in which you deploy a brand new blockchain in parallel to the first.”

Security concerns exist for both the vertical and horizontal scaling, but you probably need to think about them a little differently.

“This parallel blockchain might not be secured the same way as that first blockchain,” continued Rennekamp. “In a proof-of-stake network, you typically have a new staking token; and the security of that network is only as good as that staking token is valuable. And so horizontal scalability is improved greatly with validator set replication, in which you reuse the same validator set (from the first chain) on the second chain. Reusing the same staking token from the first chain to the second means the security of the first network is applied to the second network — it has the same security guarantees.”

The Cosmos ecosystem consists of over 250 applications and services today, including some I wrote about recently like Agoric’s smart contracts and the AWS Lamda of Web3, Aleph.im.

When asked about the role of shared security for Cosmos, Rennekamp said, “Interchain Security allows Cosmos to stay true to its philosophy of sovereignty and open source, and enables blockchains to integrate economically but not politically.”

As Cosmos continues to expand to new developers with additional dApps and services, that desire for integration will likely continue to increase as well.