coindesk.com
The co-founder of privacy-focussed Ethereum sidechain Gnosis, Martin Köppelmann, has proposed plans to reduce external dependencies and increase the security of $GNO tokens on Ethereum and Gnosis.
In a preliminary discussion on the Gnosis governance forums, Köppelmann said that while $GNO was initially minted on Ethereum, the $GNO tokens comes from a bridge contract and represent a claim against $GNO on Ethereum – which may open up potential security issues for the tokens if “unexpected events could lead to a difference between the two.”
Köppelmann cited bridge risks as a key factor in his proposal. “Currently, the bridge has the right to mint unlimited $GNO tokens on Gnosis,” he wrote. “Of course, it is only supposed to mint $GNO tokens on Gnosis if an equivalent amount has been locked on Ethereum (and that should be limited), but bridges are unfortunately still a potential source of hacks and bugs and thus are a risk.”
“Every bridge bug is very dangerous in any case but as $GNO is relevant for the consensus of the chain it is especially true for $GNO,” Köppelmann added.
Bridges refer to blockchain-based tools that transfer tokens between different blockchain networks. But this important software became a major security risk last year as exploiters managed to find weak points that led to $2 billion lost or stolen from cross-chain bridges, as CoinDesk reported.
Another focal point of discussion is the 10 million supply of $GNO tokens on Ethereum. Köppelmann said that 7 million of these tokens are supposed to be burned, there is currently no way for this to be “enforced by code” – or automatically by a smart contract if predetermined conditions are met.
“Changing the “source of truth” for $GNO to Gnosis chain would give us the opportunity to enforce the DAO vote in code,” Köppelmann noted.
The proposed solutions include increasing the supply of $GNO on Gnosis to 3 million, removing the bridge's right to mint new $GNO, and creating a separate system contract to mint new $GNO if withdrawals from the Ethereum blockchain occur.
“In practice, those changes should not affect the $GNO token on Ethereum or the $GNO token on Gnosis. However - those changes are meant to reduce external dependencies of Gnosis Chain and thus make it more resilient and secure,” the preliminary discussion concluded.