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SOL Price Slides 10% Following $322 Million Wormhole Hack

UTC by Tolu Ajiboye · 3 min read
SOL Price Slides 10% Following $322 Million Wormhole Hack
Photo: Depositphotos

SOL was affected by the attack on the Ethereum side of the Wormhole Bridge, dropping to $98 as sentiments became gloomy.

The price of Solana’s native token SOL dropped 10% from $110 to $98 after attackers capitalized on a $326 million Wormhole exploit. Wormhole is a popular bridge that links the Solana and Ethereum networks, and transfers native assets and data between both blockchains.

According to reports, the hackers stole more than 120,000 Wrapped Ethereum by tricking a series of smart contracts on Solana to digitally add an illicit transaction. Ethereum developer Kelvin Fichter weighed in on this in a tweet that read:

“After that point, it was game over. The attacker made it look like the guardians had signed off on a 120k deposit into Wormhole on Solana, even though they hadn’t. All the attacker needed to do now was to make their “play” money real by withdrawing it back to Ethereum.”

According to the charts, SOL dipped briefly to below the $98 resistance level before traders pushed it back up to $99. This occurred during early Asian trading hours. However, the price retraced slightly again to $97.32.

Following the Attack, Wormhole Tries to Make Amends

Wormhole confirmed the exploit during the early Asian hours on Thursday and added that it would provide adequate cover. The platform said that it would add Ether over the next hours to ensure that Wrapped Ether (wETH) was backed on a 1:1 basis with Ether. This is so that Ether representation on Solana will not trigger a malfunction in decentralized finance (DeFi) applications.

In a bid to recover much of the stolen funds, Wormhole developers tried reaching out to the hackers via a blockchain message. The team suggested that the attackers retain a portion of the stolen loot as a peace offering, provided they returned the rest. The message read:

“This is the Wormhole Deployer: We noticed you were able to exploit the Solana VAA verification and mint tokens. We’d like to offer you a whitehat agreement, and present you a bug bounty of $10 million for exploit details, and returning the wETH you’ve minted. You can reach out to us at [email protected]

The Issue of Security Around the Crypto Space Might Persist

Wormhole is one of the latest hacks of 2022, and follows that of Qubit’s QBridge protocol. The Qubit protocol lost $80 million in a separate attack that occurred within the past week. These high-profile breaches show just how vulnerable the crypto space remains to cyber attacks. In 2021, there was also a spate of DeFi attacks that saw hackers cart away crypto worth billions of dollars.

DeFi applications utilize smart contracts to provide a slew of financial services to users without the need for an intermediary. Some of these services include trading, lending, and borrowing funds. Following the Wormhole exploit, questions continue to examine the safety of the DeFi space and its accompanying activities.

SOL Had Recovered Before Wormhole Attack

Following the crypto crash seen on January 20th and January 22nd, SOL bulls had recouped most of their losses. Over eight days up until February 2nd, there was a total increment of 40% as SOL reached $144.70.

Altcoin News, Blockchain News, Cryptocurrency news, News
Tolu Ajiboye
Author Tolu Ajiboye

Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.

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