Hackers may have stolen more than $320 million from a bridge that links the Ethereum and Solana blockchains on Wednesday.
It is DeFi’s second-biggest hack ever, right after the $600 million Poly Network crypto heist. Notably, it targets Solana, an Ethereum competitor growing in popularity in non-fungible token and decentralized finance ecosystems.
Instead of middlemen like banks and lawyers, smart contracts are pieces of code that may be employed. Ethereum is the most popular blockchain network. Because it is cheaper and faster to use than Ethereum, Solana is becoming more popular.
Cryptocurrency holders often don’t work only in one blockchain ecosystem, so developers have built cross-chain bridges that let people send money from one blockchain to another.
What Wormhole is a way for people to transfer money between Solana and Ethereum.
Developers for Wormhole said on Twitter that the network is down for maintenance while they look into a possible attack. The protocol’s official website is not working right now.
Wormhole’s Blockchain Study
It looks like the attacker produced at least $251 million worth of Ethereum, almost $47 million worth of Solana, and more than $4 million worth of US Dollar Coin, a stablecoin that links to the price of the US dollar.
People who work with the blockchain say that bridges like Wormhole work by having two smart contracts: one on each chain. Auston Bunsen is the co-founder of QuikNode, a company that provides blockchain infrastructure to developers and businesses.
In this case, there was a smart contract on Solana and one on Ethereum, so there were two. It takes an Ethereum token, locks it into a contract on one chain, and then on the other side of the bridge, it issues a different token.
Initial investigation from CertiK
Early analysis from CertiK shows that the attacker took advantage of a flaw in the Solana side of the Wormhole bridge to make 120,000 so-called wrapped Ethereum tokens for himself. Wrapped Ethereum tokens in other coins can be used on other blockchains. According to this, they then took Ethereum that was on the side of the Ethereum.
According to CertiK, before the exploit, the bridge had a 1:1 ratio of Ethereum to the wrapped Ethereum on the Solana blockchain. It was acting as an escrow service, like a bank. This hack breaks the 1:1 peg because there is now at least 93,750 less Ethereum being held as collateral.
Wormhole says that Ethereum adds to the bridge over the next few hours to make sure that its Ethereum tokens will be backed. It’s not clear where the company is getting the money to do this.
Bridges in the crypto world aren’t going to last very long, says Vitalik Buterin, the founder of the Ethereum network. This is partly because there are limits to the security of bridges that cross borders.
This is what CertiK said in its report after the attack. When bridges have hundreds of millions of dollars of assets in escrow and operate across two or more blockchains, they become a prime target for hackers.
There have been many high-value attacks on crypto platforms in the last few months.
According to co-founder Ronghui Gu, the $320 million Wormhole Bridge hack reveals more people are trying to hack blockchains. This attack is ringing the alarm bells about how important it is to keep the blockchain safe.
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