$320M Hacked From Solana-Ethereum Bridge

February 3, 2022 9:06 pm Comments

The popular Ethereum-Solana bridge called Wormhole was recently hacked and had roughly $320 million stolen during the attack.

This bridge was developed in order to allow users to move coins and non-fungible tokens (NFTs) between the two blockchain networks.

Bridges are seen to play an essential part in allowing multiple blockchains to communicate with each other to create an ecosystem that is accessible by all.

The developers of Wormhole specifically are now investigating the details of the recent hack and have shut it down temporarily for maintenance in order to understand how it was exploited by a hacker.

The actual digital assets that were stolen during the event is estimated to be 120,000 wrapped Ethereum.

In the latest tweet from the company, it was reported that the exploit is now patched, but the occurrence raises issues on how bridges are built and if this would slow down the adoption of blockchains.

Benzinga reports:

The Wormhole hack is Decentralized Finance’s second-largest exploit ever after the $600 million Poly Network heist, according to a CNBC report.

The incident is also the largest attack ever on Solana, a so-called Ethereum killer, which has been popular recently amid the buzz surrounding NFTs, DeFi, and smart contracts.

Cryptocurrency investor Ryan Sean Adams retweeted a recent post by Ethereum’s co-creator Vitalik Buterin where he said “it’s always safer to hold Ethereum-native assets on Ethereum or Solana-native assets on Solana than it is to hold Ethereum-native assets on Solana or Solana-native assets on Ethereum.”

In the same tweet, Buterin said “fundamental security limits of bridges” are a reason why he’s optimistic about a multi-chain blockchain ecosystem.

Wormhole currently has over $1 billion in digital assets locked and supports a total of six different blockchains which indicates how a bridge like this could be helpful as it allows for digital transfers between different ecosystems.

The blockchains that are supported include Terra, Solana, Ethereum, Binance Smart Chain, Avalanche and Polygon.

When you move an asset from one blockchain to another, the asset gets “wrapped” such as wrapped Ethereum until the asset gets to the final blockchain.

Many still see communication and compatibility between blockchains as essential and the next big step for the crypto industry in general.

With that being said, the recent hack indicates the current weakness of the system and has caused investors to be a little more skeptical as it may be a few years before a improved DeFi technical solution to this problem is created.

Blockworks reports:

As far as we can tell now, only wETH has been affected, no other tokens,” a Wormhole admin, who goes by the username d231d, wrote in its Telegram group.

The admin added that the portal bridge is down and asked members not to initiate further transactions.

Some users reported stuck transactions, but the admin said that “as soon as the network is back up, you will be able to redeem the tokens you sent into the bridge.”

Investors are not contemplating whether the future of crypto and blockchain will be multi-chain or crosschain as this incident shows a clear weakness of security of crosschain bridges.

Market reactions show that both Ethereum and Solana prices are largely unaffected as they continue their existing trend in the current bear market.

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