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

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.”

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.

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