Hackers raid another crypto bridge in $7 Million take down

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By Matthew Griffin Security and Privacy 14th November 2023

WHY THIS MATTERS IN BRIEF

Blockchain itself is generally secure, but the bridges that link different blockchains together, well that’s a different story.

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Continuing the trend, another Decentralised Finance (DeFi) protocol bridge has been hacked, according to the project and various security firms. Exactly, a credit market on the Optimism network, said early Friday that it was “actively investigating a security issue within our protocol.” It added that the protocol was temporarily paused, but users could still withdraw assets.

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Security firm PeckShield said on Twitter that it had “detected an ongoing attack.” Furthermore, blockchain security firm De.Fi said on Twitter that hackers made away with 4,323.6 Ethereum – or $7.2 million worth. De.Fi initially suspected that upwards of $12 million worth of ETH was swiped, but then updated with revised data.

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Like most crypto bridge attacks – cyber attacks that target the blockchain bridges that connect different blockchain networks together – hackers were able to exploit a vulnerability in Exactly’s smart contracts to take the ETH, according to De.Fi. Optimism is an Ethereum scaling network built to enable faster and cheaper transactions than Ethereum’s own mainnet.

Exactly held over $36 million in total value locked (TVL) at the time of the hack, DeFi Llama data shows, but this figure has since dropped to $10 million.

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Exploits like this one are increasingly common in the DeFi space – the crypto sphere which aims to replace traditional financial services like borrowing and lending.

Protocols like Exactly are relatively new and experimental, and therefore sometimes have vulnerabilities that hackers can take advantage of through exploits. Last year was “the biggest year ever for hacking” in the crypto space, according to blockchain data firm Chainalysis, and many of the attacks happened in the DeFi world.

Bridges, or protocols that facilitate the exchange of different cryptocurrencies across multiple blockchains, are particularly vulnerable to hacks. This is in part due to the sheer amount of liquidity available: tokens are frozen on one side of the blockchain and then unfrozen from the other side, meaning they’re locked in smart contracts in the middle. Bridges also provide another attack vector that may not be as thoroughly tested as the blockchains they’re connected to.

Matthew Griffin / About Author

Matthew Griffin, described as “The Adviser behind the Advisers” and a “Young Kurzweil,” is the founder and CEO of the World Futures Forum and the 311 Institute, a global Futures and Deep Futures consultancy working across the next 50 years, and is an award winning futurist, and author of “Codex of the Future” series.

Regularly featured in the global media, including AP, BBC, Bloomberg, CNBC, Discovery, RT, Viacom, and WIRED, Matthew’s ability to identify, track, and explain the impacts of hundreds of revolutionary emerging technologies on global culture, industry and society, is unparalleled. Recognised for the past six years as one of the world’s foremost futurists, innovation and strategy experts Matthew is an international speaker who helps governments, investors, multi-nationals and regulators around the world envision, build and lead an inclusive, sustainable future.

A rare talent Matthew’s recent work includes mentoring Lunar XPrize teams, re-envisioning global education and training with the G20, and helping the world’s largest organisations envision and ideate the future of their products and services, industries, and countries.

Matthew's clients include three Prime Ministers and several governments, including the G7, Accenture, Aon, Bain & Co, BCG, Credit Suisse, Dell EMC, Dentons, Deloitte, E&Y, GEMS, Huawei, JPMorgan Chase, KPMG, Lego, McKinsey, PWC, Qualcomm, SAP, Samsung, Sopra Steria, T-Mobile, and many more.