Optimism-based decentralized crypto lender Exactly Protocol faced a significant setback today as it fell victim to a bridge exploit, resulting in the loss of approximately $12 million worth of ETH. The exploit involved a hacker utilizing an exploiter contract on Ethereum to transfer deposits to Optimism and then bridge the stolen funds back to Ethereum. This exploit not only resulted in the monetary loss but also caused a decline in the total value locked (TVL) on the protocol. According to data from DeFi Llama, the protocol’s TVL plummeted from $36 million to under $26 million immediately after the bridge exploit.
Impact on Governance Token and Market
The bridge exploit had further consequences for the protocol’s native governance token (EXA). Following the incident, the token experienced a decline of more than 15% in its value, currently trading at $4.91. This incident highlights the vulnerability of cross-chain bridges, especially considering the relatively new technology being utilized. According to Chainalysis, hackers targeted bridge-related vulnerabilities and managed to cause losses of over $2 billion in similar incidents last year.
Response and Overall Market Downturn
In response to the hack, Exactly Protocol acknowledged the security breach and stated that they are actively investigating the issue. However, this exploit occurred during a period of overall market downturn in the cryptocurrency industry. Altcoins such as XRP, LTC, and BCH experienced significant double-digit declines, while the leading cryptocurrency Bitcoin dropped to as low as $25,200 before making a slight recovery. Within just 24 hours, nearly $1 billion worth of positions were liquidated as the entire market witnessed a decline.
The recurring occurrences of cross bridge exploits are becoming a major concern for the crypto industry. Just recently, Hundred Finance, another lending and borrowing DeFi protocol on the Optimism network, also fell victim to a major hack, resulting in the exploitation of $7 million worth of crypto assets. These incidents emphasize the importance of maintaining robust security measures and staying vigilant in the rapidly evolving crypto landscape.
