Poly Network - The Largest Hack in DeFi History
Some thoughts on the Poly Network hack - over $600 million stolen
Hey DEFI TIMES community,
The news broke on Tuesday! Poly Network suffered one of the largest hacks in DeFi history. Over $600 million disappeared and tens of thousands of users lost access to their funds!
An incredibly tragic event. But what exactly happened?
Poly Network essentially lets users swap and transfer tokens across different blockchains. Poly Network operates on the Binance Smart Chain, Ethereum, and Polygon. Tokens are transferred between those blockchains via token bridges. One of these token bridges had a critical bug, which allowed the hacker to remove funds from the token pool!
Hacks like this happen on a regular basis in DeFi. But don’t get me wrong! This is a severe hack and we are talking about hundreds of millions of dollars here!
Some influential people in the crypto space were affected by this!
Of course, Poly Network reacted quickly and urged the hacker to return the funds.
And apparently, they succeeded - at least partially!
On Wednesday morning, $4.8 million had been returned to the Poly Network addresses. A little later, about $258 million had been returned.
On Thursday, the hacker transferred nearly all of the remaining funds to a multi-sig wallet, which is controlled by Poly Network and the hacker. The only remaining funds are USDT tokens, which were frozen by Tether - immediately after the hack!
It was a terrifying story - with a good outcome! But the good thing is that we now have another valuable piece of information to build better protocols.
We are still very early… especially when it comes to interoperability solutions!
My biggest learning from the hack was the following:
The incident really shows the need for standardized token bridges - IBC is a great step in the right direction!
Boxmining @boxmining4) Unfortunately for me, the failure happened on the ETH bridge - and the funds were on ETH. So whilst @Wing_Finance was not hacked, my savings have been stolen nonetheless. Assets such as pUSDC have value because there should be $1 USDC backing it on ETH. Now it's probably 0.
And as long as we don’t have battle-tested token bridges, we are going to see hacks!
Let’s hope for the best, but one thing is for sure…
The Poly Network hack was not the last one!
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DISCLAIMER: All information presented above is meant for informational purposes only and should not be treated as financial, legal, or tax advice. This article's content solely reflects the opinion of the writer, who is not a financial advisor.
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