Over $320 Million Stolen in Latest Apparent Crypto Hack

In an apparent breach, one of the most prominent bridges between the ethereum and solana blockchains lost more than $320 million on Wednesday afternoon. 

It is the largest attack on solana, a rival to ethereum that is gradually gaining pace in the non-fungible token (NFT) and decentralized finance (DeFi) ecosystems, and it is DeFi’s second-largest exploit ever, barely after the $600 million Poly Network crypto theft.

Ethereum is the most widely used blockchain network, and it is a major participant in the DeFi space, where programmable code known as smart contracts can take the role of middlemen such as banks and attorneys in certain types of business transactions. Solana, a more recently launched competitor, is gaining traction as a cheaper and speedier alternative to ethereum. 

Because cryptocurrency users do not always operate within a single blockchain ecosystem, developers have created cross-chain bridges that allow users to transmit cryptocurrency from one chain to another. 

Wormhole is a system that allows users to transfer tokens and non-fungible tokens (NFTs) between Solana and Ethereum.

Developers representing Wormhole confirmed the exploit on its Twitter account, saying that the network is “down for maintenance” while it looks into a “potential exploit.” The protocol’s official website is currently offline.

An analysis from blockchain cybersecurity firm CertiK shows that the attacker’s profits thus far are 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.

Bridges like Wormhole work by having two smart contracts — one on each chain, according to Auston Bunsen, co-founder of QuikNode, which provides blockchain infrastructure to developers and companies. In this case, there was one smart contract on solana and one on ethereum. A bridge like Wormhole takes an ethereum token, locks it into a contract on one chain, and then on the chain at the other side of the bridge, it issues a parallel token.

Preliminary analysis from CertiK shows that the attacker exploited a vulnerability on the solana side of the Wormhole bridge to create 120,000 so-called “wrapped” ethereum tokens for themselves. (Wrapped etherum tokens are pegged to the value of the original coin but are interoperable with other blockchains.) It appears that they then used these tokens to claim ethereum that was held on the ethereum side of the bridge.

Prior to the exploit, the bridge held a 1:1 ratio of ethereum to wrapped ethereum on the solana blockchain, “acting essentially as an escrow service,” according to CertiK.

“This exploit breaks the 1:1 peg, as there is now at least 93,750 less ETH held as collateral,” continued the report.

Wormhole says that ethereum will be added to the bridge “over the next hours” to ensure that its wrapped ethereum tokens remain backed, but it is unclear where it’s getting the funds to do this.

Ethereum founder Vitalik Buterin previously made the case that bridges won’t be around much longer in the crypto ecosystem, in part because there are “fundamental limits to the security of bridges that hop across multiple ‘zones of sovereignty.’”

CertiK noted in its post-mortem report of the incident that when bridges hold hundreds of millions of dollars of assets in escrow and multiply their possible vectors of attack by operating across two or more blockchains, they become prime targets for hackers.

Crypto platforms have faced a number of high-value exploits in recent months.

“The $320 million hack on Wormhole Bridge highlights the growing trend of attacks against blockchains protocols,” said CertiK co-founder Ronghui Gu. “This attack is sounding the alarms of growing concern around security on the blockchain.”