Wormhole bridge suffers £235m loss to second biggest DeFi exploit ever

Wormhole bridge suffers £235m loss to second biggest DeFi exploit ever
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Wormhole, a cross-chain token bridge between Solana and other blockchains, has been hacked for £235 million in the second largest DeFi hack to date.

A token bridge is a DeFi protocol that allows users to send and receive crypto between blockchains without the need for a centralised exchange. Wormhole is one of the biggest bridges on the Solana network and is a key component of its ecosystem.

The exploit saw 120,000 Ether transacted from Wormhole to a private wallet address on Wednesday.

Following the hack, Wormhole took down its bridge whilst it investigated the exploit. The project’s team also reached out to the hacker’s address to offer a $10 million (£7.4m) bounty for the safe return of the funds.

The hack was initiated by minting 120,000 wETH, or wrapped ETH, on the Solana network. Wrapped ETH is a tokenised version of normal ETH that conforms to the ERC-20 standard and thus functions across multiple blockchains.

Minutes after this first step, the attacker redeemed 93,750 wETH for ETH and converted the rest to SOL and USDC on Solana.

Whilst only the Solana chain has been affected, a report from blockchain security analysis firm CertiK highlighted that Wormhole’s bridge to the Terra blockchain may share the same vulnerability.

Wormhole has more than £750 million in total value locked into it and supports six blockchains: Terra, Solana, Ethereum, Binance Smart Chain, Avalanche, and Polygon.

On January 28, Qubit Finance’s token bridge was exploited for £59 million through the Binance Smart Chain (BSC).

The amount of funds stolen from Wormhole is only outmatched by last August’s Poly Network exploit where £450 million was stolen from the platform. In that case, almost all of the funds were returned by the hacker.

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