DeFi Bridge Security Risks and the Garden Finance Exploit: Cross-Chain Vulnerabilities Threaten Bitcoin-Native DeFi

The rise of Bitcoin-native DeFi has ushered in a new era of financial innovation, but it has also exposed critical vulnerabilities in cross-chain infrastructure. The recent Garden Finance exploit-where over $5.5 million was stolen across multiple blockchains-has become a cautionary tale for projects seeking to bridge Bitcoin's value with decentralized finance ecosystems. As Bitcoin transitions from a store of value to a productive asset, the security of cross-chain protocols has emerged as a linchpin for institutional adoption and long-term viability.

The Garden Finance Exploit: A Case Study in Cross-Chain Fragility

In October 2025, Garden Finance, a Bitcoin-native DeFi bridge, suffered a breach that resulted in the theft of $5.8 million in stablecoins and wrapped tokens across five addresses, according to a Coinotag report. The project's team initially claimed the exploit was limited to a single "solver," a mechanism used to execute cross-chain swaps, and denied any compromise of user funds or the core protocol, but the report highlighted contradictions in that narrative. Blockchain investigator ZachXBT challenged the team's statements with on-chain evidence from Garden's deployer wallet, suggesting a broader breach across Ethereum, Arbitrum, and potentially other chains. This discrepancy has sparked a heated debate about the true scope of the exploit and the transparency of project teams in the DeFi space.

PeckShield's analysis confirmed that the stolen assets were rapidly moved, underscoring the speed and efficiency of cross-chain exploits; observers have noted this pattern in several recent bridge incidents. The incident highlights a recurring issue in DeFi: the reliance on centralized or semi-centralized components, such as solvers or liquidity providers, which can become single points of failure. For Bitcoin-native projects, which often depend on Layer 2 solutions or sidechains to enable smart contract functionality, these vulnerabilities are amplified by the complexity of multi-chain interactions.

Technical Vulnerabilities: Solvers, Smart Contracts, and the Limits of Transparency

The Garden Finance exploit exposed critical flaws in cross-chain solvers and smart contracts. Solvers, which act as intermediaries to execute swaps between blockchains, often operate with limited oversight. In this case, the team's claim that the breach was confined to a single solver was contradicted by on-chain messages from the deployer wallet, which hinted at a multi-chain compromise noted in the initial reporting. This raises questions about the decentralization of solvers and the potential for collusion or insider threats.

Smart contract vulnerabilities further compounded the risk. While Garden Finance's team did not disclose specific code flaws, the incident aligns with broader patterns in DeFi exploits, such as oracle manipulation, flash loan attacks, and improper access controls, as outlined in a Bithide guide. For Bitcoin-native projects, which often rely on external chains like Ethereum or BNB Chain to execute DeFi primitives, these vulnerabilities are magnified by the need to trust cross-chain communication protocols.

Implications for Bitcoin-Native DeFi: A Double-Edged Sword

Bitcoin-native DeFi projects are increasingly leveraging cross-chain infrastructure to unlock yield generation and composability. For example, Jiuzi Holdings' partnership with SOLV Foundation in 2025 demonstrated how institutional investors could deploy Bitcoin in yield-bearing vaults on the BNB Chain, secured by Chainlink's proof-of-reserves, as reported by CoinCentral. However, the Garden Finance exploit underscores the risks of this approach. If a bridge is compromised, the entire value proposition of Bitcoin-native DeFi-its perceived security and censorship resistance-can be undermined.

The incident also highlights the tension between innovation and regulation. Projects like Cardano are exploring privacy-centric solutions to address cross-chain data privacy and compliance , but these efforts must be balanced with robust security measures. As Bitcoin becomes a productive asset, the stakes for infrastructure security rise exponentially.

Recommendations for Investors and Developers

For investors, the Garden Finance exploit serves as a reminder to scrutinize the security practices of cross-chain projects. Key metrics to monitor include the frequency of independent audits, the decentralization of critical components (e.g., solvers), and the transparency of on-chain governance. Projects that rely on centralized entities for liquidity or validation should be approached with caution.

Developers, meanwhile, must prioritize security-first design. Tools like SmartAxe-described in the SmartAxe paper-can help identify access control flaws and semantic inconsistencies in bridge contracts. Additionally, real-time monitoring and multi-signature wallets for critical operations can mitigate the impact of breaches.

Conclusion

The Garden Finance exploit is a microcosm of the broader challenges facing Bitcoin-native DeFi. As cross-chain infrastructure becomes the backbone of the next-generation financial system, the need for rigorous security, transparency, and decentralization has never been more urgent. For investors, the lesson is clear: innovation must be paired with caution. For developers, it is a call to action-to build bridges that are not only productive but also resilient.