Cross-chain messaging protocol Nomad, which allows users to send and receive tokens between different blockchains, was drained of at least USD 150m after experiencing a security exploit that allowed bad actors to spoof messages.
The project had USD 190m in total value locked (TVL) just before the exploit began, according to DeFi tracking platform DeFi Llama. However, in a matter of hours, all the funds were drained. At the time of writing, the project currently has around USD 5,600 in TVL.
Blockchain security firm BlockSec estimated the loss to be around USD 150m. This could suggest that users themselves withdraw the remaining USD 40m from the bridge.
Etherescan transactions show that the first suspicious transaction might have occurred at 9:32 PM UTC on Monday, when a user managed to remove wrapped bitcoin (WBTC) 100 (worth around USD 2.3m) from the bridge by depositing WBTC 0.01 (around USD 230).
4/ However, after some painful manual digging on the Moonbeam network, I confirmed that while the Moonbeam transaction did bridge out 0.01 WBTC, somehow the Ethereum transaction bridged in 100 WBTChttps://t.co/IBA374DtEFhttps://t.co/lDMQLxYmDs pic.twitter.com/f9TOjzyZ0i
— samczsun (@samczsun) August 2, 2022
Subsequently, the Nomad team confirmed that it was aware of the “incident involving the Nomad token bridge” adding it is “currently investigating the incident.”
We are aware of the incident involving the Nomad token bridge. We are currently investigating and will provide updates when we have them.
— Nomad (⤭⛓🏛) (@nomadxyz_) August 1, 2022
Various amounts of WBTC, wrapped ethereurm (WETH), USD coin (USDC), frax (FRAX), covalent query token (CQT), hummingbird governance token (HBOT), IAGON (IAG), dai (DAI), gerowallet (GERO), card starter (CARDS), saddle DAO (SDL), and charli3 (C3) tokens have been taken from the bridge, according to data compiled by crypto security firm PeckShield.
According to Sam Sun, Head of Security at Paradigm, the hack was possible because “the Nomad team initialized the trusted root to be 0x00” during an upgrade, which had the “side effect of auto-proving every message.”
“This is why the hack was so chaotic – you didn’t need to know about Solidity or Merkle Trees or anything like that,” Sun added. “All you had to do was find a transaction that worked, find/replace the other person’s address with yours, and then re-broadcast it.”
Anonymous Terra researcher FatMan called the incident “the first decentralized robbery.” They added that “all one had to do was copy the first hacker’s transaction and change the address, then hit send through Etherscan.”
Wow, late catching up to this, but can only remember one other time this was possible and not anywhere near this scale.
Keep in mind decentralizing robbery does not, in fact, decentralize jail time. https://t.co/16685z3nSc
— Collins Belton (@collins_belton) August 2, 2022
Cryptonews.com has reached out to Nomad for comment.
The Nomad team has not yet provided any further details about the hack. In their latest tweet, they warned about impersonators trying to collect funds.
“We’re aware of impersonators posing as Nomad and providing fraudulent addresses to collect funds,” the team said. “We aren’t yet providing instructions to return bridge funds. Disregard comms from all channels other than Nomad’s official channel.”
The Nomad Bridge hack is the latest in a series of attacks targeting bridges.
As reported, in late June, a hacker exploited a vulnerability in Harmony’s Horizon Bridge, which allows token transfers between the Harmony network and Ethereum, Binance Chain (BNB), and Bitcoin (BTC), to steal USD 100m worth of different cryptoassets.
And prior to that, the Ronin Network, an Ethereum-based sidechain made for the popular play-to-earn game Axie Infinity, was exploited to the tune of USD 600m while DeFi platform Wormhole lost almost USD 325m to hackers in February.
Source: Cryptonews
