Blockchain Bridge Wormhole Suffers Possible Exploit Worth Over $326M
The popular bridge for connecting Ethereum, Solana and more is now attempting to negotiate on-chain with the hacker.
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.”
On-chain analysts called attention to an 80,000 ether (ETH) transaction from Wormhole to an address currently in possession of over $250 million worth of ETH. According to another developer, the attacker also kept 40,000 ETH on Solana, where they have been selling for other assets.
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.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.