Wormhole Parent Commits $320M Ether to Replace Massive DeFi Hack Losses

Wormhole’s bridging portal is running again after it patched the vulnerability, the protocol stated

article-image

Source: Shutterstock

share

key takeaways

  • The total value locked on Solana fell about 12.3% from $8.55 billion Wednesday to $7.5 billion Thursday, according to DeFiLlama data
  • The ether was exploited from a smart contract, not “taken” from an Ethereum address, a Wormhole admin said

Wormhole’s parent company has dug the DeFi protocol out of a $320 million hole.

Jump Crypto replaced all 120,000 ether Wormhole lost Wednesday in the second biggest decentralized finance hack to date, a spokesperson told Blockworks. The decision by Jump Crypto, which is owned by Jump Trading, to replenish the missing funds may have headed off long-term damage to the Solana blockchain.

The total value locked (TVL) on Solana fell about 12.3% from $8.55 billion Wednesday to $7.5 billion Thursday, according to DeFi Llama data.

“[Jump Crypto] believes in a multichain future and that [Wormhole] is essential infrastructure,” the company wrote in a tweet. “That’s why we replaced 120k ETH to make community members whole and support Wormhole now as it continues to develop.”

Wormhole is one of the largest cross-chain bridges between Solana and other blockchains. It has over $1 billion in TVL and supports six blockchains: Terra, Solana, Ethereum, Binance Smart Chain, Avalanche and Polygon.

Its portal shut down for a few hours Wednesday as the company worked to patch the network vulnerability.

By 8:30 am ET Thursday, the portal’s token bridge was again operational. 

“All wETH has been restored,” a Wormhole admin, who goes by the username d231d, wrote in its Telegram group Wednesday.

The hacker’s Ethereum address hasn’t been used since transferring the tokens to their wallet, according to Etherscan data.

The ether was exploited from a smart contract, not “taken” from an Ethereum address, the admin said. The exploit took place over three different transactions, Blockworks reported.

When a user transfers assets between blockchains, the bridge steps in to lock the transaction and mint a wrapped version, such as wrapped ether (wETH), to its final chain.

Etherscan added a disclaimer to the address’ page: “There have been reports that this address is involved in the Wormhole network exploit. Please proceed with caution.”

The protocol said it plans to release an in-depth report with further details “ASAP.”

Jump Crypto President Kanav Kariya said in a tweet that Wormhole would come out “stronger than ever.”

Loading Tweet..

Wormhole said an ether contract was filled and will ensure that all wETH is backed in a 1-to-1 ratio to ensure exchangeability with the native ether.

Wormhole sent an on-chain message to the hacker after the exploit, offering a reward for the return of the tokens.

It is still unclear whether the exploiter responded. Neither the admin or protocol immediately returned a request for comment.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

AERODROME TEMPLATE.png

Research

Aerodrome is a "MetaDEX" that combines elements of various DEX primitives such as Uniswap V2 and V3, Curve, Convex, and Votium. Since its launch on Base, it has become the largest protocol by TVL with more than $495M in value locked, doubling Uniswap's Base deployment.

article-image

Also, a look into how the highly-debated SAB 121 could end up shaking out for crypto custodians

article-image

Vance, an Ohio Republican, is largely seen as crypto-friendly

article-image

Plus, all the world is green as prices across the crypto space rally, with solana reaching a nearly two-week high

article-image

Investors add to crypto positions after “turnaround in sentiment due to lower-than-expected CPI,” CoinShares research head says

article-image

Plus, Ethereum is in the midst of a vibecession

article-image

Also, former Valkyrie CEO lands new leadership role at Canadian investment firm Cypherpunk Holdings