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Wormhole Suffers Second-Biggest Hack in DeFi, $320 Million in wETH Stolen

Although decentralized finance (DeFi) has been billed by many to be the future of money, the persistently demonstrated vulnerability of DeFi protocols has put a sizable dent in the image of the nascent sector.

A week after it was reported that Qubit Finance had lost $80 million in a hack, network bridge protocol Wormhole becomes the latest victim in an worryingly increasing  trend of DeFi hacks.

Wormholes Lose $320 Million to a “Solved” Problem

Wormhole is a communication bridge network between Solana, Ethereum, and other top decentralized finance (DeFi) networks. The protocol currently has an over $1 billion TVL.

On February 2nd, at 9:42 PM, the Wormhole team announced that its network was temporarily down for maintenance as they were looking “into a potential exploit.”

Two hours later, the Wormhole team announced that the hacker had made away with 120,000 wrapped Ether (wETH) worth approximately $320 million, making it the second-largest DeFi hack to date.

On the Flipside

  • Wormhole has pledged to add ETH to its pool to ensure that wETH is backed one-for-one, and to get the network back up. The protocol tweeted:

According to reports, the network vulnerability which led to the funds being stolen from Wormhole had been identified on January 13th, and on January 16th, the team reported that they had fixed the vulnerability by pushing out updated code on Github.

Following the hack, Paradigm security researcher “samczsun” revealed that the Wormhole team has reached out to the hacker’s address on the Ethereum network, offering a $10 million bounty in return for the stolen funds.

Why You Should Care

The continuous exploits of DeFi protocols have served to validate claims that the security of DeFi is yet to reach a level fit to accommodate the huge sums being stored within them.

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    This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed to be financial legal or tax advice. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss

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    Author

    Milko Trajcevski has been in the crypto world for years, and as such has gathered both a skill for writing as well as a native prowess when it comes to understanding everything that occurs within that world. Through skilled writing and determination, he covers articles about cryptocurrency, tokens, blockchain, crypto-asset regulations, crypto wallets, exchanges, liquidity, DApps, forks, mining, security, and blockchain technologies. He is a professional with a track record of proven expertise within the crypto space.