Wormhole is a mechanism that allows users to transfer tokens and NFTs between Solana and Ethereum. It admitted hacks for about $320 million, far more than the first estimate of $250 million.
Diving Deeper in Solana
Solana is a scalable decentralized blockchain network. Now managed by the Solana Foundation in Geneva, and constructed by Solana Labs in San Francisco, 1 Solana is cheaper than other blockchains like Ethereum. Solana processes transactions substantially faster and has lower transaction costs.
To put it simply, the Solana (SOLUSD) cryptocurrency has grown by over 12,000 percent in 2021, to a market value of over $66 billion, making it the fifth-largest cryptocurrency by this measure.
Not only Solana but other leading decentralized finance (DeFi) networks use Wormhole as a communication bridge. Existing projects, platforms, and communities can use Solana’s high speed and cheap cost to transport tokenized assets smoothly across blockchains.
They announced on Twitter that ETH will contribute over the next hours to ensure that wETH has a 1:1 backing. They also stated that they are striving to restore the network as soon as possible.
Wormhole’s Twitter account announced earlier on Wednesday that the network was offline for maintenance owing to a potential exploit.
However, the exploit, as discovered by Paradigm security researcher samczsun, looked to be legitimate at that point.
The hackers created coins using the Solana VAA verification, according to a message on the Ethereum blockchain from Wormhole. They offered them a whitehat contract and a $10 million bug bounty for exploit details and wETH earned.
The term validator action approval or VAA refers to the procedure for approving transactions.
Hacker to Pay Wormhole
Wormhole assumes, with a nod and a wink that the hacker was acting in good faith. It will pay them $10 million in exchange for bringing up a flaw. It does, however, want its quarter-billion dollars back.
The request for comment has yet to be answered by Wormhole.
Wormhole is compatible with Avalanche, Binance Smart Chain, Oasis, Polygon, and Terra, in addition to Ethereum and Solana. It allows users of one chain to wrap assets and use them on another, resulting in lower costs or more uses.
The user must first lock their Ethereum into a smart contract before receiving a like amount of Wrapped Ethereum into Solana.
After that, they can exchange WETH for Solana-based tokens. If the preceding message is correct the hacker was able to short-circuit this. As well as mint WETH without having to keep ETH locked up.