ASAS-BridgeAMM: Trust-Minimized Cross-Chain Bridge AMM with Failure Containment
Shengwei You, Aditya Joshi, Andrey Kuehlkamp, Jarek Nabrzyski

TL;DR
ASAS-BridgeAMM introduces a trust-minimized, failure-containment cross-chain bridge with dynamic risk management, significantly reducing insolvency risk while maintaining high transaction volume during stress scenarios.
Contribution
It presents a novel bridge-coupled AMM with Contained Degradation, formally specified operational states, and dynamic risk adjustments to improve security and resilience in cross-chain bridges.
Findings
Reduces worst-case insolvency by 73% compared to baseline architectures.
Maintains over 104% of transaction volume during stress periods.
Achieves >0.9999 probability of solvency in adversarial simulations.
Abstract
Cross-chain bridges constitute the single largest vector of systemic risk in Decentralized Finance (DeFi), accounting for over $2.8 billion in losses since 2021. The fundamental vulnerability lies in the binary nature of existing bridge security models: a bridge is either fully operational or catastrophically compromised, with no intermediate state to contain partial failures. We present ASAS-BridgeAMM, a bridge-coupled automated market maker that introduces Contained Degradation: a formally specified operational state where the system gracefully degrades functionality in response to adversarial signals. By treating cross-chain message latency as a quantifiable execution risk, the protocol dynamically adjusts collateral haircuts, slippage bounds, and withdrawal limits. Across 18 months of historical replay on Ethereum and two auxiliary chains, ASAS-BridgeAMM reduces worst-case…
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Taxonomy
TopicsBlockchain Technology Applications and Security · Distributed systems and fault tolerance · Credit Risk and Financial Regulations
