Renowned on-chain analyst ZachXBT has once again voiced concerns regarding suspicious activity behind the recent surge in cross-chain transaction volumes facilitated through bridge protocols. He argues that this spike may not entirely reflect healthy growth in the Web3 ecosystem.

In a message on his personal Telegram channel on Tuesday (June 3, 2025), ZachXBT responded to a post by X user @arjunnchand, who praised LiFi's record transaction volume. ZachXBT cautioned that this increase might not signal organic adoption, but could instead be linked to hackers laundering stolen funds in an effort to cover their tracks.

Bridge protocols are fundamentally designed to enable the transfer of digital assets across blockchain networks, especially from layer-2 or sidechains to the Ethereum mainnet. However, the availability of tools like Tornado Cash or decentralized exchanges (DEXs) with mixing functionalities can open doors for malicious actors to obscure the origin of illicit funds.

LiFi, functioning as a bridge protocol aggregator, faces the same challenges as many other Web3 platforms. Its permissionless nature makes it nearly impossible to prevent malicious users from utilizing the service. This situation is reminiscent of the THORChain incident, where a transaction volume spike followed the Bybit hack, but the protocol declined to cooperate in freezing the stolen funds.

Celebrating Transaction Volume Prematurely

LiFi has come under scrutiny for what is seen as premature celebration of its increasing transaction volume, despite the possibility that a large portion of it might come from hackers. While the development team claims to have made efforts to reduce exposure to illegal transactions, they also admit that abuse by bad actors remains difficult to prevent.

ZachXBT estimates that roughly 15% to 25% of total activity on the LiFi protocol may be associated with hacker groups allegedly linked to North Korea. He suggests that sudden surges in bridge activity could be a sign of laundered funds moving through chain hopping—a tactic involving repeated cross-chain transfers to evade address tracking systems.

Of course, not all bridge volume increases are caused by illicit activities. Some organic behaviors such as airdrop farming, staking incentives, and cross-chain arbitrage strategies also contribute to higher transaction volumes. Certain blockchain networks with thriving DeFi ecosystems naturally experience a large amount of cross-chain activity.

According to data from DeFiLlama, total cross-chain bridge transaction volume has reached nearly US$900 billion, or around IDR 14.6 trillion, in the past 24 hours. Among the various networks, Arbitrum recorded the highest volume, totaling US$2.79 billion or more than IDR 45 trillion.