Secure Cross-Chain Transfers: Combining Holochain and Threshold Signatures
The Holo-Block Bridge is an optional application that can be run independently of the HoloDEX for the purpose of Bridging between Holochain and blockchain currencies.
This solution utilizes guardians to generate a threshold signature and access the respective blockchain smart contract.
While primarily designed to bridge blockchain to Holochain the application can also be effectively used to bridge between various blockchains.
1. Problem Statement: Traditional cross-chain bridges often introduce centralization risks or vulnerabilities due to single points of failure. This solution addresses these limitations through a decentralized and highly secure architecture.
2. Architecture:
2.1 Multi-Layered Design:
- Inner Layer: The target blockchain smart contract holds the locked assets.
- Outer Layer: Holochain acts as a secure overlay, managing threshold signature generation for unlocking funds.
2.2 Threshold Signature Scheme:
- Independent Guardians: A pre-defined set of Holochain nodes (“Guardians”) hold private keys.
- Combined Power: Unlocking requires a specified number of guardians (e.g., 7 out of N) to contribute partial signatures, reaching a designated threshold.
2.3 Signature Ceremony:
- Initiation: User initiates a cross-chain transfer from Holochain to the target blockchain.
- Challenge and Response: Guardians generate unique cryptographic challenges using Verifiable Random Function (VRF). They generate blinded partial signatures using their keys and challenges.
- Blind Aggregation: Partial signatures are securely shuffled and combined on-chain or off-chain, concealing the final signature and individual contributions.
- Direct Signature Submission: Guardians directly submit combined signatures to the smart contract, bypassing user wallets for enhanced security.
- Verification and Unlock: The smart contract verifies the signatures and releases the corresponding funds.
3. Key Advantages:
- Enhanced Security:
- Threshold signatures eliminate single points of failure and offer robust attack resistance.
- Blind aggregation prevents collusion and knowledge of final signatures.
- Direct signature submission to the smart contract reduces potential vulnerabilities in user wallets.
- Decentralized Control: No single entity controls the unlocking process, promoting trust and resilience.
- Transparent Validation: The entire process is verifiable on the Holochain chain, ensuring transparency.
- Optimized Processing:
- Off-chain aggregation and validation reduce blockchain interaction and gas fees.
- Direct signature submission streamlines the process.
4. Conclusion: This solution provides a secure and efficient foundation for cross-chain transfers, leveraging Holochain’s distributed validation and optimized threshold signature scheme. It fosters trustworthy asset movement across blockchain ecosystems while prioritizing security, decentralization, and efficiency.
5. Future Work:
- Explore advanced threshold signature schemes for further optimization
- Develop dynamic guardian selection mechanisms for continuous resilience improvement.
- Explore the use of Secure Multi-party Computation for better scalability, better security and mobile phone compatibility.
Guardian Fees
Use of the bridge will incur a cost in order to incentivize people to run the application and act as guardians.
A mechanism will need to be developed for setting a fee which incentivizes people to use the app and become guardians. It is also good to allow participants transacting over the cross chain bridge to themselves become guardians and cancel out the cost associated with generating the threshold key. By using a guardian it is also possible to batch transactions to reduce gas fees on the blockchain. This would allow us to produce the lowest cost cross chain transfer mechanism possible. It also encourages diversity of guardians and the use of the the application as part of the Wallet, HoloDEX and guardian as a complete cross-chain exchange solution.
This would be implemented as a separate (Optional) DHT to facilitate a secure and efficient cross-chain transfer solution built on Holochain’s distributed validation and optimized threshold signature scheme. It eliminates single points of failure, minimizes blockchain interaction, and ensures asset movement integrity between blockchain ecosystems.
If people want to use the bridge without downloading the Happ and contributing as a guardian then they will need to pay the guardians fee.