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Hacks in the decentralized finance (DeFi) sector have increased significantly over the past few years. The latest attack was on the Wormhole bridge that links the Ethereum (ETH/USD) and Solana (SOL/USD) blockchain.
An attacker managed to drain $320 million worth of Ethereum from the protocol, and while these funds have since been restored, the hack has left a dent, and it has been ranked as the fourth-largest crypto hack of all time.
Fourth-largest crypto hack
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An interview on CNBC addressed the nature of this DeFi hack with the Senior Director at Mandiant, Robert Wallace, who stated that the size of this hack dwarfs anything that has been recorded in the traditional financial sector.
According to Wallace, the largest heist in the banking sector was valued at $80 million. However, with a $320M hack being only the fourth-0largest one in DeFi, it shows that the space could be larger than what has been estimated.
Wallace also urged investors to ensure they are well-protected before partaking in any of the cutting-edge technologies in the sector. Some of these ways include doing personal research and understanding the protocols and investments in the sector.
Wallace also recommended investors use “blue chip” platforms that have been in the DeFi sector for a while and have undergone security tests that guarantee the safety of user funds. The platforms under this category include MakerDAO, Compound, Uniswap and Aave.
$320M Wormhole hack
The hack on the Wormhole bridge happened after an attacker exploited a vulnerability in the protocol. The hacker managed to steal 120,000 worth of ETH tokens. The funds have since been restored to the protocol. The stolen funds were in wrapped Ethereum, which is a version of the Ethereum token used on other blockchains, which in this case was Solana.
Following this exploit, Wormhole wrote a message to the hacker on the blockchain, asking them to return the stolen funds and receive a $10 million bounty. However, the hacker is yet to publicly respond to this message. Additionally, the protocol also promised a $10 million reward to anyone who could lead to the hacker’s arrest.