On Wednesday, one of the most widely used cross-blockchain bridges may have been the target of a $326 million breach.
The project’s official Twitter handle revealed the bridge is down as the team investigates a possible exploit in a tweet. Additionally, official website merely states, “Portal is Currently Unavailable.”
Wormhole sent 80,000 ether (ETH) to an address with over $250 million in ETH, according to on-chain analysts. Another developer claims that the attacker owned 40,000 ETH on Solana, which they sold for other assets.
Cash Bounty
The Wormhole team has reached out to the exploiter’s Ethereum address. On top of that, they offered $10 million bounty for recovering the cash, according to famed pseudonymous Paradigm security researcher “samczsun” in a tweet.
The attack has sparked concern in DeFi circles because it implies that ETH crossed to Solana may now be unbacked.
Cross-blockchain bridges typically work by encasing an asset, like ETH. It is a contract that generates a counterpart asset on the bridged chain.
The ETH issued by Wormhole cannot be bridged back to the Ethereum main chain and is now worthless. So. the repercussion for Solana lending markets and other protocols are unclear.
Wormhole ETH
George Harrap, the founder of Solana DeFi platform Step Finance, told CoinDesk that he trusts Jump Capital. Consequently, it bought Wormhole developer Certus One in August 2021, to back up the hijacked ETH. On another note, he added that if this does not happen. A number of Solana-based platforms that accept ETH as collateral may become partially insolvent.
Wormhole ETH is useless because no one wants to invest in it. As a result, it belongs to everyone who has it. This encompasses not just the DeFi protocols but also their users. Also, it affects everyone else who maintains a sense of equilibrium.
Wormhole confirmed the loss of 120,000 ETH in a follow-up tweet. The team said that funds would be provided for Solana’s bridge to back up the wrapped ETH. Wormhole did not specify who would donate the cash, however.
In a Reddit post in January, Ethereum co-founder Vitalik Buterin predicted that bridges will become less popular in the future. He cited the threats to bridged assets’ backing.
