The overall market is trying to stabilise, and is trading in a narrow range. Implied volatility has general eased, except in $ETH where, unfortunately, an overnight hack occurred on Wednesday: blockchain bridge “Wormhole” confirmed that the exploiter stole approx. $300m worth of crypto assets. Around 120k ETH tokens syphoned down the bridge Wormhole.
Wormhole is a series of smart contracts enabling the “bridging” of token assets from one blockchain to another, 1:1 in a supposedly secure way. E.g. A user can bring ETH (wrapped ETH) on the Ethereum side, which gets locked up and pooled, and then receive in exchange SOL-compatible ETH tokens. Apparently, last year in autumn, a “github” code pull request was made after a deficiency was discovered on the Solana side. The verification signature, which certifies ownership of the token on the Solana side, could actually be spoofed. The fix for this was just about to be finally released when some code activity attracted the attention of a hacker. The issue was exploited and the hacker was able to withdraw real tokens from the wormhole pool. Wormhole reacted quickly and stopped the service, released a patch, and bailed out the missing funds. There could have eventually been a catastrophic domino effect on the collateralised debt markets on Solana, assuming that those wrapped ETH had 1 to 1 value with no risk.
Important to mention is the fact that Solana is mainly backed by VCs and FTX/Alameda, for whom it is a very important key platform. According to the latest news yesterday, 50% of all funds have already been restored and wormhole is back up again!
Today, Jump Trading announced that it would settle the imbalance of the bridge. Prices have adjusted back to parity versus their original tokens outside of Solana.
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