Wormhole Loses $320 Million In A Hack

February

8

0 comments

On the afternoon of Wednesday, Wormhole is one of the most famous bridges. The news involves the linkage of blockchains Solana and Ethereum have deprived of $320 million in a hack.

It should be noted that both of these blockchains are quite renowned when it comes to the DeFi world in which the programmable contracts can substitute bankers as well as lawyers in NFTs and some transactions.

On the other, a few customers want to stick with only one blockchain; therefore, such bridges like Wormhole are a significant go-between.

Bear in mind that it is the second biggest hack ever, right after the Poly Network crypto heist worth $600 million if we talk about Solana, the competitor of Ethereum and is increasingly getting traction in decentralized finance (DeFi) and non-fungible tokens (NFTs).

On the other hand, Ethereum is the most commonly used blockchain network, and in the world of DeFi, it is the giant player. Although Solana was introduced recently, it is gaining more popularity because it is faster and cheaper than Ethereum.

Holders of crypto mostly do not work exclusively within a single blockchain, so developers have made cross-chain bridges to help them in sending cryptocurrency between two chains.

The Wormhole is defined as a protocol that lets its customers transfer NFTs and tokens between the blockchain Ethereum and Solana.

The representatives of Wormhole on Twitter have confirmed the hack, and according to them, the network is currently down for maintenance to investigate the potential exploit. aIt is worth mentioning here that the protocol’s official website is offline currently.

According to the analysis by the cybersecurity firm of blockchain named CertiK, the attacker’s profits are at least worth $251 of Ethereum. On the flip side, approximately $47 million in Solana, and as far as USDC is concerned, it is more than $4 million.

Initial investigation by the v CertiK portrays that the hacker exploited a vulnerability on the Wormhole Bridge’s Solana side to create 120,000 wrapped copies of Ethereum tokens. The wrapped tokens of Ethereum are pegged to the original’s value; however, they are competitive with other blockchains. It seems that then they utilized these tokens for claiming Ethereum that was present on the Ethereum Bridge’s side.

Before the exploit, the bridge was at a ratio of 1:1 of Ethereum and wrapped Ethereum on the blockchain of Solana. But this exploit breaks this peg of 1:1 because approximately 93,750 ETH are now held less as a guarantee.

Wormhole further said that they would add the Ethereum in the bridge over the next hours to ensure that the number of wrapped Ethereum remains the same. But it is not clear yet where they will get funds.

In recent times crypto blockchains are getting a large number of hacks. So, it shows a dire need for more strict rules to minimize such incidents as much as possible and provide customers with a better experience.

How will this attack impact the trust of users in crypto?

About the author, Awi Khan

Leave a Reply

Your email address will not be published. Required fields are marked

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}