Over $326 Million Ether Stolen In Second Largest DeFi Hack Ever, SOL Falls 10% After Wormhole Exploit

One of the most popular cross-blockchain bridges – going by the name Wormhole – recently fell victim to a hack that swept about 120,000 wrapped Ether (wETH) tokens from the platform, worth approximately $322 million.

In what marks the second-largest DeFi exploit ever, just after the $600 million Poly Network crypto heist, this is the largest attack to date on Solana, a rival to Ethereum that is increasingly gaining traction in the non-fungible token (NFT) and decentralized finance (DeFi) ecosystems: CNBC reports.

What is Wormhole?

Token bridges like Wormhole allow users to receive cryptocurrencies of different forms — Ether, Solana, and more — without needing a centralized exchange to act as a custodian. Wormhole’s network has over $1 billion in total value locked, and it supports six blockchains, namely Terra, Solana, Ethereum, Binance Smart Chain, Avalanche, and Polygon.

Cross-blockchain bridges like Wormhole function by having two smart contracts, one on each chain. In this case, there was one smart contract on Solana and one on Ethereum, which were exploited to thieve funds from.

Wormhole had allegedly offered a $10 million bug bounty to anyone who’s able to return the funds, soon after the thievery happened.

How It Happened

The ether cryptocurrency, based on the Ethereum platform’s ERC20 system, is a token built on the Binance Smart Chain (BSC). The actual hack, on the other hand, was executed on the Solana side of the token bridge.

Some worried that its Terra bridge may also be vulnerable to such attacks. Business Insider notes that experts in this field have reverse engineered and explained the hack on Twitter, now that it has already been patched. Moreover, Wormhole’s team has assured users that its wETH supply will be renewed soon enough as well. A few hours ago, Wormhole updated news of the restoration of funds by tweeting,

Exploits Obtained From The Hack

Blockchain cybersecurity firm CertiK showed through its analysis that the attacker’s profits included at least $251 million worth of Ethereum, nearly $47 million in Solana, and more than $4 million in USDC, a stablecoin pegged to the price of the U.S. dollar.

According to Cointelegraph, the hackers have used part of these funds to buy SportX (SX), Meta Capital (MCAP), Finally Usable Crypto Karma, and Bored Ape Yacht Club (BAYC) tokens.

Solana’s SOL Takes A Major Fall

The price of Solana’s SOL token dipped below the $100 mark after attackers took advantage of the exploit on Wormhole. The cryptocurrency fell 10% in the past 24 hours, trading at $98 during Asian afternoon hours, down from the $110 level during U.S. evening on Wednesday, CoinDesk observed.

At the time of writing, SOL is down by 7.6%, trading at a price value of $97.63 after its fall below the 100 dollars mark.

Sneh Dokania is an Economics major student with an inquisitive disposition seeking to articulate facts, information and news stories in a candid manner on Clout News.

Leave a Reply