Hackers have once again attacked Decentralized Finance (DeFi)i. This time, they stole 120,000 wETH from the Wormhole space, which is a bridge for Solana’s network. This is the biggest hack so far in 2022.
Ether laundering attempt
The DeFi project, called Wormhole, is a so-called crosschain bridge that aims to connect the Solana network with other decentralized DeFi networks. The developers of the project admitted on Wednesday that the project was hacked and 120,000 wETH were stolen from it, which was worth more than $320 million at the time of the hack.
What’s more, the wETH funds were not just stolen, but actually fraudulently minted for later exchange. 93,750 wETH were converted into ETH, while the rest were exchanged for other altcoins in the Solana network.
Recall that wETH is a packaged version of Ether that can move in the DeFi space thanks to a 1:1 exchange relative to its parent cryptocurrency. The idea is that these funds can always be exchanged back into the same value of ETH. Unauthorized minting can therefore lead to inflation, which can ultimately have a significant impact on the price of the wrapped coin. This example reflects the laundering of funds that end up in the market, threatening its stability.
Action from Wormhole and Venture Capital
Shortly after the hack, the Wormhole project offered the hacker $10 million in exchange for returning the stolen funds. Jump Crypto, on the other hand, did not wait for the hacker’s decision. All this in order not to abuse the users’ trust. Jump Crypto is a Venture Capital firm which is also the owner of Certus One, the creator of the Wormhole croschain. Its operation has received a very friendly reception in the community.
How has it affected the Solana network?
Although concerns about a significant drop in the price of SOL, as a result of the hack, were on the lips of many market analysts, Solana itself has not experienced this. A similar situation can be observed in the case of Ether, which coped with this difficult situation. Definitely worse is the reputation of Solana, which in recent months has suffered as a result of temporary suspension of network activity, which was the result of overloads. The emergence of hacks, further undermines its strength. This is also another time when the reputation of the DeFi space has been damaged. Similar situations threaten it as an alternative financial system. It remains to be believed that the lessons will be learned from the hack, so that similar situations will not happen again.
