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There is something unusual about this hack. And it's not the hack itself. Crypto projects get hacked every week. Multichain bridges are the target of the month

There is something unusual about this hack. And it's not the hack itself. Crypto projects get hacked every week. Multichain bridges are the target of the month, with eye-watering amounts and complex code running on different blockchains, and off blockchain. And a Solana bug like this one is to be expected. What is surprising is to see a project promise to fully repay everyone, within two hours of the attack occurring. That size of cash for a "we'll fund it back up", and that kind of speed is really unusual. In the immediate aftermath of the hack, people were commenting that the now unbacked Solana side eth was still trading near its normal prices, and it stayed that way until the announcement. This leads me to guess that insiders must have known that there would be a chunk of money coming to refill the coffers after the hack, which in turn means that the decision to send the project hundreds of millions of dollars must have been made at or before minutes had elapsed from the hack.

swalsh 5y ago
The value of WETH going to zero could cause a near system wide collapse. It is being used as collateral for a staggering number of loans. Bridges in the colloquial way of saying it, are too big to fail. I wonder if network insiders had been prepared for the eventuality of something like this happening, and were just executing a playbook.
- BeFlatXIII 5y ago
  How much impact would a total cryptocurrency collapse have on the outside economy?
  - zepto 5y ago
    Probably a nice uptick
    - faeyanpiraat 5y ago
      Or millions of working people would suddenly be able to afford a gaming GPU and would disappear into imaginary worlds for a couple of weeks.
  - fuzzer37 5y ago
    Nearly zero.
  - swalsh 5y ago
    Crypto (and more so Solona) has an extreme trade deficit, it's importing way more capital then it's currently exporting (the primary export today is blockspace, I think as DAO's start running SASS services, that will increase the exports). The impact today would be nearly zero. As the deficit evens out, that might change. The local crypto economy is pretty young (it's virtually brand new). As it expands these capital flows will probably change.
  - X6S1x6Okd1st 5y ago
    I haven't read anything concrete that shows a clear contagion risk, but https://twitter.com/angela_walch https://twitter.com/angela_walch is one of the people in the space to follow that is talking about it
- thebean11 5y ago
  WETH (on Ethereum itself) is totally different. It's a pretty simple contract, doesn't require code on other blockchains or offchain code, and there are no Ethereum accounts with "special permissions" so the attack surface is much much smaller. Contract code if anybody is curious. It's less than 100 lines of Solidity, easy to read even if unfamiliar with the language: https://etherscan.io/address/0xc02aaa39b223fe8d0a0e5c4f27ead9083c756cc2#code https://etherscan.io/address/0xc02aaa39b223fe8d0a0e5c4f27ead...
  - swalsh 5y ago
    Sure, thought that was implied. WETH on Solona is not the same thing obviously.
ejb999 5y ago
>> "we'll fund it back up" This part puzzles me to - immediately agreeing to plug the $320Million hole really makes you wonder how there is that much money freely available to just pay people back so easily.
- JGM_io 5y ago
  Cuz there are millions of people buying nft's? And the investors probably have some insurance or clause where they add another $€¥ against interesting valuation as a convertible or something
  - IncRnd 5y ago
    You _say_ that, but this wouldn't be the first player in this space to say they have billions of dollars to cover everything, when they actually had $0 after having siphoned all profits along the way.
    - deleted 5y ago
      [deleted]
  - Sohcahtoa82 5y ago
    > Cuz there are millions of people buying nft's? [citation needed] This absolute reeks of the type of baseless claim that someone living in a bubble surrounded by NFT fanatics would claim. Be careful not to think that the trends within your social network are indicative of the population as a whole.
- sumeno 5y ago
  Because they don’t need $320 million dollars, they need “$320 million” in crypto which is easy enough to create out of thin air
  - thebean11 5y ago
    You must be a billionaire if you know how to create $320 million in ETH
pjc50 5y ago
They've said that, but has it actually happened?
- lima 5y ago
  Yes: https://etherscan.io/address/0x3ee18b2214aff97000d974cf647e7c347e8fa585 https://etherscan.io/address/0x3ee18b2214aff97000d974cf647e7...
  - throwhauser 5y ago
    What exactly on that page indicates that "we'll fund it back up" has occurred?
    - disruptalot 5y ago
      Take a look at the internal transactions. Within the last 24h, there's been several transactions where new ETH has been wrapped and sent to the contract. The balance is ~120k WETH now which is around the same amount as the hack.
      - danielvf 5y ago
        Here it is on one page - fun to watch $300+ million come off Binance, and get wrapped and transferred to the contract: https://etherscan.io/address/0xe4f6df25710e75a08cb967e831ea536f0b9d6ac8 https://etherscan.io/address/0xe4f6df25710e75a08cb967e831ea5...
- 300bps 5y ago
  Yes, and I get a mental picture in my mind of a guy walking down the street with $320 in his pocket. Some thugs walk up and take his $320. So he stops at the nearby ATM and withdraws another $320. Then walks down the same street with even more thugs waiting.
tradingthrwaway 5y ago
I think it's worth being mindful of who effectively owns the bridge. Jump acquired certus one, who developed the wormhole. Jump has invested quite heavily in the solana ecosystem, so while $300mm is a lot of money, it's a small price to pay for a firm of their size.
- danielvf 5y ago
  It's also likely that the majority of the money on the bridge was theirs to begin with.
- qeternity 5y ago
  $300 is not a small sum for Jump...this isn't FAANG we're talking about.
  - tradingthrwaway 5y ago
    Maybe not "small", but surely a sum they can put up without thinking twice. They're a top trading firm, whose competitors have spent $300mm to run hundreds of miles of cables to save microseconds in latency.
    - qeternity 5y ago
      > They're a top trading firm, whose competitors have spent $300mm to run hundreds of miles of cables to save microseconds in latency. It's microwave towers, and it's to save milliseconds. You're not dealing in mics until you're in the colo. But those are investments, which will generate huge returns. Throwing $300m to paper over a hack isn't remotely the same.
  - tim333 5y ago
    It's a bit hard to tell how much money/assets they have as they are private but they employ 700 people on trading crypto. I imagine they have made a few bob.
323 5y ago
It's not that surprising, nor unprecedented. Many exchange hacks were immediately refunded. Trust is the most important thing in crypto, exchanges are making billions in profit, not covering a $320m loss could generate billions in damage by crypto prices plunging, so it makes a lot of economic sense to avoid that. There are investors holding billions in Solana crypto, so it's in their interest to avoid a Solana loss of trust.
- boringg 5y ago
  This is what I was thinking. The first players have made excess returns to patch the hole up and it's in their best interests. If everyone panicked due to the hack they would have lost a lot of the value/confidence of their assets that they didn't pay that much for. Whereas original asset holders would much rather keep the confidence/value in the asset. It does create a morale hazard if that was indeed what happened - at this point just speculation.
- rvba 5y ago
  > exchanges are making billions in profit Is this realized profit in real cash, or book profit based on valuations? Who puts real money into crypto by billions? I somehow doubt that enough actual physical people come to buy crypto. Is this money "invested" by funds? This whole ethereum thing sounds like the old joke "we exchanged a dog worth 1 million for 2 cats worth 0,5 million each".. yet now they try to find someone who will buy this stuff at those bullshit valuations - to be the one left holding the bag. Also if so much real money is generated then where are the billionaires? Actual ones who divested from crypto (to lower risk) and bought unsexy real world stuff. I understand that in theory crypto is always growing, but who is coming to buy that 1 BTC for 36k usd? To get billions it would have to be a lot of people.
  - 323 5y ago
    I'm no accountant, but I trust Bloomberg knows about these things: > Binance generated at least $20 billion of revenue last year, according to a Bloomberg analysis of its trading volume and fees. https://www.bloomberg.com/news/features/2022-01-09/binance-ceo-cz-s-net-worth-billionaire-holds-world-s-biggest-crypto-fortune https://www.bloomberg.com/news/features/2022-01-09/binance-c... > Also if so much real money is generated then where are the billionaires Same article: > With $96 billion, Binance CEO Changpeng Zhao is closing in on tech titans including Facebook’s Mark Zuckerberg and Google’s Larry Page and Sergey Brin.
abzolv 5y ago
It's only unusual if you make the mistake by thinking about it in terms of US $320 million hard fiat currency. That's probably NOT what's going to happen. It's most likely going to be 320 million USDT (Tether) or an equivalent amount of ETH (which was most probably purchased with Tether).
- thebean11 5y ago
  Are you implying this startup can somehow get free Tether? Are they affiliated at all?
  - woah 5y ago
    And when are they going to open this service up to the public?
  - SEJeff 5y ago
    It isn't a startup... https://twitter.com/iamnomad/status/1489245139763703812?s=21 https://twitter.com/iamnomad/status/1489245139763703812?s=21 https://twitter.com/JumpCryptoHQ/status/1489301013408497666 https://twitter.com/JumpCryptoHQ/status/1489301013408497666
    - thebean11 5y ago
      Ah I wasn't aware of that. So Jump Trading has a relationship with Tether..?
      - SEJeff 5y ago
        Not that I’m aware of.
- f311a 5y ago
  Even if you can get cheap USDT, that's is still real money that can be exchanged.

swalsh 5y ago

The value of WETH going to zero could cause a near system wide collapse. It is being used as collateral for a staggering number of loans. Bridges in the colloquial way of saying it, are too big to fail. I wonder if network insiders had been prepared for the eventuality of something like this happening, and were just executing a playbook.

BeFlatXIII 5y ago
How much impact would a total cryptocurrency collapse have on the outside economy?
- zepto 5y ago
  Probably a nice uptick
  - faeyanpiraat 5y ago
    Or millions of working people would suddenly be able to afford a gaming GPU and would disappear into imaginary worlds for a couple of weeks.
- fuzzer37 5y ago
  Nearly zero.
- swalsh 5y ago
  Crypto (and more so Solona) has an extreme trade deficit, it's importing way more capital then it's currently exporting (the primary export today is blockspace, I think as DAO's start running SASS services, that will increase the exports). The impact today would be nearly zero. As the deficit evens out, that might change. The local crypto economy is pretty young (it's virtually brand new). As it expands these capital flows will probably change.
- X6S1x6Okd1st 5y ago
  I haven't read anything concrete that shows a clear contagion risk, but https://twitter.com/angela_walch https://twitter.com/angela_walch is one of the people in the space to follow that is talking about it
thebean11 5y ago
WETH (on Ethereum itself) is totally different. It's a pretty simple contract, doesn't require code on other blockchains or offchain code, and there are no Ethereum accounts with "special permissions" so the attack surface is much much smaller. Contract code if anybody is curious. It's less than 100 lines of Solidity, easy to read even if unfamiliar with the language: https://etherscan.io/address/0xc02aaa39b223fe8d0a0e5c4f27ead9083c756cc2#code https://etherscan.io/address/0xc02aaa39b223fe8d0a0e5c4f27ead...
- swalsh 5y ago
  Sure, thought that was implied. WETH on Solona is not the same thing obviously.

ejb999 5y ago

>> "we'll fund it back up" This part puzzles me to - immediately agreeing to plug the $320Million hole really makes you wonder how there is that much money freely available to just pay people back so easily.

JGM_io 5y ago
Cuz there are millions of people buying nft's? And the investors probably have some insurance or clause where they add another $€¥ against interesting valuation as a convertible or something
- IncRnd 5y ago
  You _say_ that, but this wouldn't be the first player in this space to say they have billions of dollars to cover everything, when they actually had $0 after having siphoned all profits along the way.
  - deleted 5y ago
    [deleted]
- Sohcahtoa82 5y ago
  > Cuz there are millions of people buying nft's? [citation needed] This absolute reeks of the type of baseless claim that someone living in a bubble surrounded by NFT fanatics would claim. Be careful not to think that the trends within your social network are indicative of the population as a whole.
sumeno 5y ago
Because they don’t need $320 million dollars, they need “$320 million” in crypto which is easy enough to create out of thin air
- thebean11 5y ago
  You must be a billionaire if you know how to create $320 million in ETH

pjc50 5y ago

They've said that, but has it actually happened?

lima 5y ago
Yes: https://etherscan.io/address/0x3ee18b2214aff97000d974cf647e7c347e8fa585 https://etherscan.io/address/0x3ee18b2214aff97000d974cf647e7...
- throwhauser 5y ago
  What exactly on that page indicates that "we'll fund it back up" has occurred?
  - disruptalot 5y ago
    Take a look at the internal transactions. Within the last 24h, there's been several transactions where new ETH has been wrapped and sent to the contract. The balance is ~120k WETH now which is around the same amount as the hack.
    - danielvf 5y ago
      Here it is on one page - fun to watch $300+ million come off Binance, and get wrapped and transferred to the contract: https://etherscan.io/address/0xe4f6df25710e75a08cb967e831ea536f0b9d6ac8 https://etherscan.io/address/0xe4f6df25710e75a08cb967e831ea5...
300bps 5y ago
Yes, and I get a mental picture in my mind of a guy walking down the street with $320 in his pocket. Some thugs walk up and take his $320. So he stops at the nearby ATM and withdraws another $320. Then walks down the same street with even more thugs waiting.

tradingthrwaway 5y ago

I think it's worth being mindful of who effectively owns the bridge. Jump acquired certus one, who developed the wormhole. Jump has invested quite heavily in the solana ecosystem, so while $300mm is a lot of money, it's a small price to pay for a firm of their size.

danielvf 5y ago
It's also likely that the majority of the money on the bridge was theirs to begin with.
qeternity 5y ago
$300 is not a small sum for Jump...this isn't FAANG we're talking about.
- tradingthrwaway 5y ago
  Maybe not "small", but surely a sum they can put up without thinking twice. They're a top trading firm, whose competitors have spent $300mm to run hundreds of miles of cables to save microseconds in latency.
  - qeternity 5y ago
    > They're a top trading firm, whose competitors have spent $300mm to run hundreds of miles of cables to save microseconds in latency. It's microwave towers, and it's to save milliseconds. You're not dealing in mics until you're in the colo. But those are investments, which will generate huge returns. Throwing $300m to paper over a hack isn't remotely the same.
- tim333 5y ago
  It's a bit hard to tell how much money/assets they have as they are private but they employ 700 people on trading crypto. I imagine they have made a few bob.

323 5y ago

It's not that surprising, nor unprecedented. Many exchange hacks were immediately refunded. Trust is the most important thing in crypto, exchanges are making billions in profit, not covering a $320m loss could generate billions in damage by crypto prices plunging, so it makes a lot of economic sense to avoid that. There are investors holding billions in Solana crypto, so it's in their interest to avoid a Solana loss of trust.

boringg 5y ago
This is what I was thinking. The first players have made excess returns to patch the hole up and it's in their best interests. If everyone panicked due to the hack they would have lost a lot of the value/confidence of their assets that they didn't pay that much for. Whereas original asset holders would much rather keep the confidence/value in the asset. It does create a morale hazard if that was indeed what happened - at this point just speculation.
rvba 5y ago
> exchanges are making billions in profit Is this realized profit in real cash, or book profit based on valuations? Who puts real money into crypto by billions? I somehow doubt that enough actual physical people come to buy crypto. Is this money "invested" by funds? This whole ethereum thing sounds like the old joke "we exchanged a dog worth 1 million for 2 cats worth 0,5 million each".. yet now they try to find someone who will buy this stuff at those bullshit valuations - to be the one left holding the bag. Also if so much real money is generated then where are the billionaires? Actual ones who divested from crypto (to lower risk) and bought unsexy real world stuff. I understand that in theory crypto is always growing, but who is coming to buy that 1 BTC for 36k usd? To get billions it would have to be a lot of people.
- 323 5y ago
  I'm no accountant, but I trust Bloomberg knows about these things: > Binance generated at least $20 billion of revenue last year, according to a Bloomberg analysis of its trading volume and fees. https://www.bloomberg.com/news/features/2022-01-09/binance-ceo-cz-s-net-worth-billionaire-holds-world-s-biggest-crypto-fortune https://www.bloomberg.com/news/features/2022-01-09/binance-c... > Also if so much real money is generated then where are the billionaires Same article: > With $96 billion, Binance CEO Changpeng Zhao is closing in on tech titans including Facebook’s Mark Zuckerberg and Google’s Larry Page and Sergey Brin.

abzolv 5y ago

It's only unusual if you make the mistake by thinking about it in terms of US $320 million hard fiat currency. That's probably NOT what's going to happen. It's most likely going to be 320 million USDT (Tether) or an equivalent amount of ETH (which was most probably purchased with Tether).

thebean11 5y ago
Are you implying this startup can somehow get free Tether? Are they affiliated at all?
- woah 5y ago
  And when are they going to open this service up to the public?
- SEJeff 5y ago
  It isn't a startup... https://twitter.com/iamnomad/status/1489245139763703812?s=21 https://twitter.com/iamnomad/status/1489245139763703812?s=21 https://twitter.com/JumpCryptoHQ/status/1489301013408497666 https://twitter.com/JumpCryptoHQ/status/1489301013408497666
  - thebean11 5y ago
    Ah I wasn't aware of that. So Jump Trading has a relationship with Tether..?
    - SEJeff 5y ago
      Not that I’m aware of.
f311a 5y ago
Even if you can get cheap USDT, that's is still real money that can be exchanged.