Friday, April 12, 2024

The danger of DeFi cross-chain bridges is demonstrated by the wormhole hack.

Solana is an established name in the smart contract blockchain and also the fastest growing network. It has grown astonishingly fast considering it was just launched in March 2020, just about 2 years ago. Solana’s total value locked amount on its network for DeFi protocols grew to just over $8 billion from $152 million in March 2021, at the time of publication. This information was provided by DeFiLlama.

As its progress and growth were being charted, the network has faced several outages and issues. The most recent issue Solana had to deal with was a security issue with its Wormhole token bridge. This occurred just two weeks ago on February 3rd and resulted in the loss of 120,000 wrapped Ether tokens. The value of the tokens was $375 million based on the current ETH market price. This hack is the biggest one of 2022 and the second largest since the Poly Network loss of $600 million.

Wormhole is a protocol used by token bridges to connect multiple blockchain network. Oasis, Avalanche, Ethereum and Terra are some which are connected by Wormhole. Users can use this protocol to send and get tokens without having to deal with a centralized exchange or do tedious conversion. In this hack, only wrapped Ether as an asset, was exploited. Certik, an auditing firm for smart contracts said that Wormhole’s bridge connected to the Terra Blockchain could be impacted by this vulnerability too.

The bridging protocol released a report which contains details of the incident, along with the hack chronology. It contains information of security audits along with a roadmap and other information. Wormhole announced a bounty program with a $10 million reward with ImmuneFi to uncover problems with the web UI, Wormhole integrations and guardian nodes. This hack is a sign to developers who work on bridging protocols to be cautious and plug loopholes.

Cryptured Team
Cryptured Team
The writers team at Cryptured.com is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.
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