- Wintermute gave Optimism’s team the wrong blockchain address
- Hacker drained 20 million tokens into a new Optimism wallet held by him
Optimism, the Ethereum scaling solution, has lost the equivalent of $15 million in OP governance tokens, CoinDesk reported. The protocol sent the funds to crypto market maker Wintermute, who gave Optimism’s team the wrong blockchain address.
A hacker pounced, exploiting the vulnerability immediately. Wintermute CEO Evgeny Gaevoy took responsibility for letting the breach happen.
Even less cause for Optimism
This is more bad news for Optimism. A few weeks ago, the protocol organized an ill-fated OP token airdrop, which sent the token’s price plummeting. Today, it lost another fifth of its value.
What happened?
Optimism’s team explained in a recent blog post that the protocol had sent 20 million OP tokens to Wintermute around half a month ago, when the OP token airdrop was about to get underway. The Optimism Foundation’s Partner Fund was the source of the tokens.
Gaevoy said that the money would have been used to “provide liquidity in the OP token upon its listing on centralized exchanges.” The funds came in the form of a loan.
The address given was not on Optimism
Sadly, the market maker gave Optimism the wrong wallet address, creating the opportunity for an attack. The address given was for an Ethereum and not an Optimism wallet. The funds were supposed to be safe in a multi-signature wallet held by Wintermute.
When Wintermute realized what had happened, they tried to retrieve the funds, but a hacker beat them to it.
They syphoned the 20 million tokens into a new Optimism wallet held by them, withdrew about a million, converted the tokens into ether, and transferred the ether to an unknown address via privacy mixer Tornado Cash.
Remaining 19m tokens still in hacker’s wallet
The 19 million tokens that remain are still in the cybercriminal’s wallet. They will be able to vote on Optimism community governance proposals until the tokens are moved from that wallet.
Gaevoy said in a statement:
We are not sure why they chose not to liquidate all of [the tokens] at once. There is hope that it is a white hat exploit…however, we are currently operating under the premise that it is not the case.
About Optimism
Optimism is an L2 blockchain on Ethereum that can process and combine transactions and pass them back down to Ethereum. It features low fees and enables fast transactions, thus helping scale up the Ethereum Mainnet.
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