Harmony Protocol loses $100M in blockchain bridge attack

LAGOS (CoinChapter.com) — Harmony Protocol, an “Effective Proof-of-Stake” blockchain network, has suffered a security breach resulting in the loss of 85,837 Ether (approximately $100 million).

Hackers compromised Harmony blockchain’s “Horizon Bridge,” which interconnects multiple blockchains, on June 24. The bridge was essentially a two-of-five multi-sig. That means it would transfer native the funds to third parties if requested by any two addresses.

Data from Etherscan, an Ethereum blockchain explorer, shows hackers sent various tokens out of the compromised bridge across eleven transactions. They have since started sending the stolen tokens to a random wallet to swap them for ETH.

The stolen tokens from the Horizon Bridge include Tether (USDT), Wrapped BTC (WBTC), and USD Coin (USDC). Others include Dai (DAI), Frax (FRAX), Wrapped Ether (WETH), Aave (AAVE), Sushi (SUSHI), and Frax Share (FXS), AAG (AAG), and Binance USD (BUSD).

Meanwhile, the blockchain protocol has reiterated its commitment to recovering the stolen tokens. In addition, Harmony indicated that it collaborates with exchanges and security agencies to determine who is responsible for the attack.

“Harmony is working around the clock as we continue our investigation alongside the FBI and multiple cyber security firms. We will share more information once we have an update.”

Harmony Protocol said.

Harmony Protocol (ONE) Plummets Following Attack

After the exploit, Harmony Protocol native token (ONE) dropped significantly as the network conducted the post-mortem investigation. According to data from Coingecko, ONE in the last 24 hours plummeted by more than 10% to trade at $0.02400257.

The token saw its market cap decrease by more than $40 million in the last 24 hours. In addition, its valuation has dropped by over 60% in 2022.

At the time of publication, Harmony protocol’s token has a market cap of around $295 million with a 24-hour trading volume of $80 million. It also has a circulating supply of 12 billion ONE coins and a total supply of 13.2 billion.

How Are Cross-Chain Bridges Safe?

It’s worth noting that Harmony Protocol is only the latest victim of the growing attacks experienced across cross-chain bridges recently. Recall that a hacker stole more than $600 million after breaching a bridge connecting Axie Infinity’s Ronin sidechain with the Ethereum network.

Similarly, THORChain suffered multiple exploits, just as $600 million (although the funds were eventually returned) was also stolen from Poly Network. Additionally, hackers also successfully exploited Chainswap and AnySwap for millions of dollars.

Additionally, with more than 70 cross-chain bridges deployed, experts who predicted a rise in attacks are correct. Recall that Vitalik Buterin, co-founder of Ethereum, had earlier sounded the alarm over the security of cross-chain bridges, warning of their vulnerability in the event of 51% attacks.

Notably, it is high time the decentralized finance space starts seeking solutions to the recurring attacks plaguing the industry.

Please leave this field empty

Subscribe Today
for our Weekly Newsletter

Email Address *

Free Weekly Crypto News without the spam.

Check your inbox or spam folder to confirm your subscription.