Crypto hacks may be becoming a trend with the rate of frequency we’re seeing in recent times. Last month, Crypto.com admitted that about 400 of its customers were hacked and assets worth $33 million were stolen. A little while before then, crypto exchange Bitmart lost $196 million worth of cryptocurrency to hackers in December. Also, in what was described as the largest crypto heist of all time, Poly Network lost over $600 million to a hacker called ‘White Hat’, who later returned the crypto assets claiming that he wanted to bring a shortcoming of the Network’s system to their attention.
On Wednesday, Wormhole, one of the most popular crypto bridges that link the Ethereum and Solana blockchains lost over 4320 million worth of crypto assets to a hack. The hack is already being dubbed the second-largest crypto heist, following the Poly Network incidence.
We have a number of cryptocurrencies existing in the crypto space with Bitcoin and Ethereum among the most populous. Ethereum is the most used blockchain network and this is because its network has the ability to eradicate the need for middlemen in certain types of transactions. Ethereum, however, is seeing competition from Solana. Solana is a fast-growing blockchain and is gaining traction because it is cheaper and faster to use, compared to Ethereum.
With the unending number of cryptocurrencies currently available, people do not operate exclusively on just one blockchain ecosystem, hence the need for cross-chain bridges such as Wormhole, that’ll allow users to send and receive cryptocurrency from one chain to another. Wormhole is a platform whose protocol allows users to move their crypto tokens and NFTs between Solana and Ethereum networks.
Yesterday Wormhole took down its website following the hack. A tweet from the platform read “The wormhole network is down for maintenance as we look into a potential exploit. We will provide updates here as soon as we have them. Thank you for your patience”.
According to an analysis from cybersecurity firm CertiK, the hacker stole at least $251 million worth of Ethereum, almost $47 million worth of Solana and over $4 million worth of USDC. A preliminary analysis from the firm mentioned that the hacker exploited a vulnerability on the Solana side of the wormhole bridge to create 120,000 so-called “wrapped’ Ethereum tokens for themselves”. The hacker(s) then used these tokens to claim Ethereum held on the Ethereum side of the bridge. Before the hack, Wormhole held a 1:1 ratio of Ethereum to wrapped Ethereum on the Solana blockchain. “This exploit breaks the 1:1 peg, as there is now at least 93,750 less ETH held as collateral”, the report said.
The platform said that Ethereum will be added to the bridge “over the next hours” to ensure that its wrapped token continues to have a backing even though it is in a dilemma as to where to derive the funds from.
Ibhadojemu Lucky Emmanuel is a graduate of Education and Economics from the University of Benin. He has a passion for tech and business and has been writing professionally for over a period of five years. He's written across various topics and segments and knew tech-business was it when he first stumbled on it. He has a great passion for music and arts, and wants to visit as many countries as he can someday.
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