While we are starting to use more efficient AMB bridges for ERC 20 tokens, there was no secret that the Fuse bridge was struggling to function in the last months.
To solve this, need to pin the reasons for the malfunction:
with more validators in the Fuse network, the fees for relaying between networks increase
gas on the Ethereum is unstable, which is a big instability factor for the relay fees.
validators have no incentive to keep the bridge to function. And every once can join being a validator.
The deployment of FIP8 last week reduced significantly the number of validators, currently from 80 to 30. But taking 1-3 in mind, it’s more like a patch but not a cure for all issues.
We discussed internally a few solutions to reduce the fees ,like using more advanced signatures (Schnorr, BLS) or trying commit-challenge protocol where the signature validation (the expensive computation) is done only when someone’s challenging the relay transaction. These solutions being elaborated bring more complexity to the system and do not solve the validators incentives.
Eventually, we’ve come to the conclusion that the right thing to do is to separate the consensus validators and the bridge validators set. It would mean that:
The bridge validator set would be a closed one that rarely changes. We’ve discovered that having a liquid set is problematic for stability of the bridge. In the future, it is possible to bring a DAO to govern the validator set updates and bridge updates in general.
The validators would earn fees for relaying Fuse token from Fuse network to Ethereum (withdrawal fee). This may not be available on stage one.
Regarding the consensus. Validators would have to relay the minting of new Fuse from Fuse to Ethereum, to keep the supply of Fuse correct. The
NewValidatorSetupdate will not be needed which releases the burden to relay the most expensive transaction.
The plan of action is to deploy this bridge with a constant set of validators by the end of the month. We would be pleased if community members would join (or re-join) as bridge validators, but since the top priority is to have a well functioning bridge to relay Fuse between networks, the economic incentives might be missing at the launch time.