Wormhole network lost $320 million in hack

The hackers took advantage of a vulnerability in the network’s smart contracts

03.02.2022 - 11:55

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What’s new? On the evening of Wednesday, February 2, the Wormhole cross-chain protocol announced a hack on Twitter. The amount of damage was 120 000 wETH (more than $320 million). The network, which is a bridge between Ethereum and Solana, is currently down for maintenance and to study the details of the incident.

https://t.co/TqkVwHqo9c— Wormhole🌪 (@wormholecrypto) February 3, 2022

What is known about the hacker attack? The developers assume that the attackers took advantage of an exploit in the Wormhole bridge smart contracts and were able to withdraw funds. They received wETH tokens but did not deposit collateral in ETH. As a result, most of the wETH tokens were exchanged for ETH on the main network.

The creators of the protocol sent a transaction to the hackers’ address, offering them a $10 million reward for identifying the vulnerability and returning the issued wETH. So far, the developers have sent “additional ETH” to the pool to support liquidity.

What is Wormhole? It is a cross-chain protocol that enables funds to be transferred between different blockchains. The project supports Ethereum, Solana, Binance Smart Chain, Polygon, Avalanche, Oasis, and Terra networks.

Coincidentally, about a month ago, Ethereum co-founder Vitalik Buterin wrote on Reddit about the fundamental limits to the security of bridges and the potential for such cross-chain protocols to be hacked. According to Buterin, the Solana and Ethereum networks will come under additional pressure amid these developments.

My argument for why the future will be *multi-chain*, but it will not be *cross-chain*: there are fundamental limits to the security of bridges that hop across multiple "zones of sovereignty". From https://t.co/3g1GUvuA3A: pic.twitter.com/tEYz8vb59b— vitalik.eth (@VitalikButerin) January 7, 2022