PolyNetwork Falls Victim to Hack

In a recent development in the crypto world, PolyNetwork, a renowned cross-chain protocol, fell prey to a significant security breach. Attackers exploited a smart contract function within its bridge tool, leading to the illicit issuance of billions worth of various tokens.

PolyNetwork Falls Victim to Hack

Attackers exploited a smart contract function within its bridge tool, leading to the illicit issuance of billions worth of various tokens.

The Intricate Mechanics of the PolyNetwork Attack

Bridges, which serve as a crucial mechanism for users to swap tokens across different blockchains, were manipulated in this attack.

The attackers ingeniously tricked the bridge into issuing tokens on one network that, in reality, were non-existent. This sophisticated manipulation of the bridge’s functionality underscores the technical prowess of the attackers.

The Extent of Illicit Token Issuance: A Closer Look

The scale of the illicit token issuance was staggering. The attackers minted an enormous 24 billion Binance USD (BUSD) and BNB on the Metis blockchain, along with 999 trillion Shiba Inu (SHIB) on the Heco blockchain. Additionally, they issued millions of other tokens on various networks, including Avalanche and Polygon.

This illicit activity led to the attackers’ wallet holding a paper value of over $42 billion worth of tokens, an unprecedented amount in the history of crypto hacks.

The Role of Limited Liquidity and Security Measures in Thwarting the Attackers

Despite the massive illicit token issuance, the attackers were stymied by the lack of liquidity and the swift security measures implemented by developers. The Metis developers confirmed that there was no “sell liquidity available” for the BNB and BUSD, and the illicitly-issued METIS tokens were promptly locked on the PolyNetwork bridge.

However, the attackers managed to find liquidity for some other illicitly-minted tokens and exchanged 94 billion SHIB tokens, 495 million COOK, and 15 million RFuel for Ether (ETH).

The Persistent Vulnerability of Bridges in the Crypto Ecosystem: A Cause for Concern

This attack marks the second time PolyNetwork has been targeted, bringing to light the inherent vulnerability of bridges in the crypto ecosystem.

Despite their critical role in facilitating the transfer of billions of dollars worth of tokens between various networks, bridges have increasingly become prime targets for attacks and hacks, posing a significant challenge to the security of the crypto industry.