It’s becoming increasingly clear that exploiting smart contracts on blockchain networks can allow hackers to pull off heists of unbelievable proportions – and PolyNetwork, one of the top protocols enabling the transfer of tokens between networks, is no exception. On Sunday morning, hackers were able to generate over $42 billion in non-existent tokens before anyone had noticed, reaping the rewards while leaving the majority of the industry out in the cold.

Exploitation of Vulnerability in PolyNetwork’s Bridge Tool

But what exactly happened to cause billions of dollars worth of tokens to suddenly appear out of thin air? It turns out that the hackers exploited a vulnerability in PolyNetwork’s bridge tool. Bridges are used to facilitate the transfer of tokens between different blockchains by locking the value on one network and releasing it on another. It appears that attackers were able to manipulate the way bridges work, and used the bridge to issue tokens on a network that didn’t actually have any. The attackers’ wallet had $42 billion worth of tokens, but liquidity issues hindered their success. Meaning, without buyers, it was essentially impossible for them to monetize their large stash.

To compound the situation, it appears that this was not the first instance where PolyNetwork had been targeted. In a previous attack in August 2021, hackers stole $600 million from the platform, setting a record at the time. Experts believe that the hackers accessed the private key used to sign cross-chain messages.

Importance of Constant Attention to Crypto Security

The attack on Sunday once again raises alarm bells on the security of bridges in the crypto ecosystem. While they are invaluable in transferring tokens between different networks, they remain the top targets of hackers. The PolyNetwork hack highlights the ongoing challenge of cryptocurrency security, necessitating constant attention and development.

The crypto industry is adopting more secure measures like hardware wallets and biometrics to safeguard wallets and investments. Secure storage is a must for crypto users, given the evolving industry and growing hacker threats.

PolyNetwork responded quickly and effectively to mitigate most of the damage caused by the hackers. In an effort to return stolen funds, they asked exchanges and miners to help them track and freeze the assets. With the help of various industry players, the network was ultimately able to, at least partially, restore the funds. The attackers’ wallet had $42 billion worth of tokens, but liquidity issues hindered their success.

Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.

The post Exploiting a Smart Contract: Attackers Pull the Heists of Billions on PolyNetwork Bridges! appeared first on Boxmining.

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Filed under: Bitcoin - @ July 3, 2023 6:05 am