Next Generation Secure Bridge for Bitcoin
A typical bridge would have a custodian - whether it be a human or an organization - manage the underlying asset. However, the existence of a custodian could expose one's asset to potential loss/theft due to arbitrary actions on the part of the custodian or some malicious entity.
The entire crypto space spawned by Bitcoin has been growing steadily over the years, with the value proposition being that people can protect their own assets through a system of trustless networks without depending on particular entities. We believe Shinobi will bring a whole new level of security to the "Internet of blockchains" by creating a trustless, autonomous bridge mechanism for different blockchains.
Traditional Bitcoin Bridge Solutions
Let's look at how a custodian serves a role in traditional bridge solutions.
WBTC
BitGo is the largest provider of crypto custody solutions in the industry. The company provides WBTC, a Bitcoin bridge solution, and manages the underlying assets of WBTC themselves.
Their service is great if you want to have your crypto assets managed with a reasonable level of security. However, the excellent user experience they offer doesn't make them immune to human errors - there is always a room for mistake as long as humans are involved in the process. As many people have learned the hard way, major custodians are not exempt from having their assets "Goxed" (i.e., hacked) by those with bad intentions. The underlying asset of WBTC is susceptible to the same risk.
RenBTC
Unlike BitGo, RenBTC has its underlying assets secured by multiple individuals.
As a result, the project has managed to remove a single point of failure by diversifying the custody function across the entire network. That said, the underlying asset could still be at risk if multiple custodians are hacked simultaneously. Additionally, the open and decentralized nature of the RenBTC protocol means that some anonymous custodians with malicious intent might decide to steal the protocol's underlying assets if they have a strong enough influence over the network, without being caught by the regulator thanks to their anonymity. On the other hand, this would not be the case for BitGo as malicious actors will likely run into legal issues if they attempt to steal their customers' assets.
How Shinobi Eliminates Custodians
If you want to use a bridge that involves custodian - it doesn't matter whether it's centralized or decentralized - you need to compromise on security.
Shinobi is a completely non-custodial protocol that provides a secure, next generation bridge solution for Bitcoin.
While traditional bridges try to ensure security of their underlying asset through a custodian, Shinobi leverages a smart contract named "Shinobi Gateway" to protect its assets.
Specifically, Shinobi Gateway receives BTC and issues a "receipt" in the form of SBTC on Secret Network, using BTC as an underlying asset. Conversely, it also returns BTC to the user in exchange for SBTC provided - all conducted in an autonomous fashion.
Crucially, a custodial solution provided by humans entails the risk of these operations not being executed correctly or in a manner that was not originally intended, whereas there is no such risk in Shinobi Gateway, whose only purpose in life is to accurately execute the pre-specified set of tasks described above.
Shinobi Gateway is designed to release the underlying asset to a specified address only when a pre-defined condition is met - specifically the gateway needs to see SBTC, which it has issued as a receipt for BTC, returned to the contract.
Shinobi has implemented Shinobi Gateway by building on top of a unique feature for protecting sensitive data provided by Secret Network. To learn more about how the feature is implemented on Secret Network, check out Secret Network Wiki.