One of the most popular cross-blockchain bridges may have been the victim of a hack worth over $326 million on Wednesday.
In a tweet, the project’s official Twitter handle confirmed that the bridge is currently down while the team investigates a potential exploit, and the official website simply reads, “Portal is Temporarily Unavailable.”
In a tweet, prominent pseudonymous Paradigm security researcher “samczsun” noted that the Wormhole team has reached out to the exploiter’s address on the Ethereum network, offering a $10 million bounty for returning the funds.
The hack has raised alarm in DeFi circles because it now means ETH that has been bridged to Solana may be unbacked.
Cross-blockchain bridges often work by taking an asset, such as ETH, and locking it in a contract to issue a parallel asset on the bridged chain.
It is not immediately clear what the ramifications for Solana lending markets and other protocols might be if the ETH issued by Wormhole cannot be bridged back to the Ethereum main chain and is now valueless.
In an interview with CoinDesk, George Harrap, founder of Solana DeFi platform Step Finance, said he expects Jump Capital, which purchased Wormhole developer Certus One in August 2021, to step in to backstop the hacked ETH. If not, he added, a number of Solana-based platforms that accept ETH as collateral may now be partially insolvent.
"If nobody backs it and the coins are truly gone then Wormhole ETH is worth 0 and everyone who has a balance of it becomes worthless, DeFi protocols, users, everyone," he said.
In a follow-up tweet, Wormhole confirmed a total loss of 120,000 ETH and said that funds would be added to the bridge to backstop the wrapped ETH on Solana, though the team did not specify who would provide the funds:
Presciently, in a Reddit post in January, Ethereum co-founder Vitalik Buterin argued that bridges will not be popular in the future, due in part to risks to the backing of bridged assets:
CoinDesk has reached out to Certus One, the developers of Wormhole, and others for comment and will update with their response.
UPDATE (Feb. 2, 21:58 UTC): Figure in headline and story changed to account for hacked assets on both the Ethereum and Solana blockchains.
UPDATE (Feb. 2, 22:39 UTC): Adds comments from Step Finance founder.
UPDATE (Feb. 2, 22:45 UTC): Adds Wormhole confirmation of 120,000 ETH amount.
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