The invariant enforced by an assumption

Graduate · enrolled learners

This lesson opens with The Harmony Horizon bridge, 23 June 2022.

What happened

The Horizon bridge between Harmony and Ethereum was secured by a two-of-five multisig: any two of five authorized addresses could authorize a transfer of the bridge's locked funds. On 23 June 2022 an attacker who had compromised at least two of those five signing keys used them to authorize eleven transactions that drained about 100 million dollars from the Ethereum side. Harmony's own incident report said its team had found evidence that private keys were compromised and no evidence of a breach in its smart-contract code; the keys were all encrypted and stored by Harmony itself. The FBI later attributed the theft to the North Korean groups Lazarus and APT38. The contracts did exactly what two valid signatures told them to do.

The decision point

The bridge's invariant was the same as every bridge's: withdrawals are backed by locked deposits, and only authorized withdrawals happen. That invariant was enforced by an assumption, that fewer than two of the five signing keys would ever be in an attacker's hands at once. The assumption was never written as a risk a user could weigh, and it was weak: two of five means an attacker needs to compromise only two things, and the five keys were not five independent parties: Harmony held and stored all of them. When the assumption failed, the invariant failed instantly and completely, because nothing else stood behind it. A user assessing this bridge needed to ask not is it audited but how many independent compromises would break its core promise, and the answer was two.

Recorded loss

$100,000,000

Orientation and Year One are open: anyone can read them without an account. From Year Two onward the lessons are for enrolled learners, because progress through the later years only means anything if it is tracked against a record.

It is free. We do not sell the list and there is nothing to buy at the end of it.