Market Analysis Report (03 Feb 2022)

Wormhole, one of the most popular cross-chain bridges connecting Ethereum, Solana and more, has seen a hacker take advantage of an exploit to steal $320 million worth of cryptocurrency from it.

On-chain data shows a transaction for 80,000 ether (ETH) from Wormhole to an address that is currently in possession of over $250 million worth of the second-largest cryptocurrency by market capitalization. A developer has also revealed the attacker kept 40,000 ETH on Solana, a network in which they have been selling other assets.

Prominent pseudonymous Paradigm security researcher “samczsun” has noted that Wormhole team reached out to the exploiter’s address on Ethereum to offer a $10 million bounty for returning the funds.

Cross-chain bridges work by taking an asset and locking it in a smart contract to then issue a parallel asset on the bridged chain. The incident may mean ETH circulating on the Solana blockchain may now be unbacked.

Wormhole has confirmed the loss of 120,000 ETH and said funds would be added to backstop the ETH on Solana, although it did not reveal who would provide the funds.