16 ms·

Nomad drained of $150m due to a coding mistake

301 points by onion2k 4y ago

rapsey 4y ago
Well done and congrats to the hackers. One step closer of ridding the world of web3 nonesense.
- Fargoan 4y ago
  - doopy1 4y ago
    Welcome to HN, where crypto is the devil and must be eradicated at all costs. Anyone who thinks otherwise here is either perceived to be an idiot or a grifter.
    - rjbwork 4y ago
      It should, perhaps, tell you something that a community with one of the most highly concentrated populations of technically literate people on the internet are so vehemently against a technology. Crypto is just a paperclip maximizer for silicon and electrons that does what traditional companies have been doing for at least 60 years. Only 100000x less efficiently.
      - sneak 4y ago
        This community is nowhere near consensus on this matter. A small minority of loud naysayers is.
        rjbwork 4y ago
        I don't think it is a minority. In my personal and work life, it does seem to be something like 80/20 or 90/10. You might be right though, it's impossible to tell without doing some kind of vaguely rigorous poll.
        JumpCrisscross 4y ago
        > This community is nowhere near consensus on this matter. A small minority of loud naysayers is There's an information bubble. It's not the crypto skeptics. There's a reason when governments around the world have moved to ban crypto there's been little to no popular resistance beyond angry 4channers.
        sneak 4y ago
        Substantually more governments have invested time, money, and regulatory effort into the crypto ecosystem than have banned it. The facts don't support the narrative to which you seem to be attached. a16z is a large investor in the space and proponent, as well as several other prominent tech investment firms. Are they angry 4channers? It's ok to be personally against it, but please don't misrepresent the facts.
        JumpCrisscross 4y ago
        > more governments have invested time, money, and regulatory effort into the crypto ecosystem than have banned it Lots of chatting. Looking at actual dollars and laws, we're weighing the elephants of China, India and increasingly the EU against...Singapore, El Salvador and Malta? Outside young men, disproportionately minorities, crypto has a limited beachhead [1]. It was an easy money phenomena with historic comparison. We're now seeing the regulatory mood shifting decisively against it with limited competent pushback. > a16z is a large investor in the space and proponent They're notable for where they're prominent and where they're not. Aggressive fundraising followed by SoftBank/Tiger style deployment. Tweets and blog posts galore. Yet middling returns, even on an internal basis, and absolutely zero presence worth mentioning in D.C. I'm no greybeard. But I've worked in finance long enough to see the game they're playing. [1] https://www.pewresearch.org/fact-tank/2021/11/11/16-of-americans-say-they-have-ever-invested-in-traded-or-used-cryptocurrency/ https://www.pewresearch.org/fact-tank/2021/11/11/16-of-ameri...
      - FabHK 4y ago
        > Only 100000x less efficiently. You're being too kind to crypto there, I think, by a few orders of magnitude.
        yarg 4y ago
        Only 2^200 times less efficiently (even that's generous).
        FabHK 4y ago
        I'd say between 1e7 and 1e11. 1e5 is too generous, 1e60 is way too harsh.
        yarg 4y ago
        When a fundamental part of token generation is brute-forcing secure hashes?
        FabHK 4y ago
        Yes, but you still need, say, one computer to run what Bitcoin does (without the PoW hashing - just checking and recording 5 transactions per second). BTC uses around 15 GW currently, a computer say 15 to 150 W, so we are talking a factor of 1e9 (Giga) to 1e10.
    - Ekaros 4y ago
      Actually yes. I think crypto promoters are either idiots or grifters...
  - Jerrrry 4y ago
    Non Sequitur. You can do both logically. You are a horrible convincer.
  - endisneigh 4y ago
    This is terrible obviously, but if code is law and someone writes bad code and exploits that is it “illegal”? The entire basis of even having judges, courts, etc is an acknowledgment that the “code” is imperfect and certain circumstances require human intervention. Going without that is, well… YMMV.
    - Fargoan 4y ago
      Code is law is just a meme
      - misnome 4y ago
        Isn't it a consequence? If the entire foundation of your system is irreversibility and finality, then doesn't it effective becomes true? (unless you are big enough to force a network-wide rollback...).
        cinntaile 4y ago
        If you ignore the fact that the actual law might have something to say about this, then sure.
        ghaff 4y ago
        But that's exactly what the decentralized crowd is arguing. You encode transactions and no centralized authority (e.g. a country's judicial system backed by people with guns) can override it. A natural consequence is that no one can override a mistake either. Legal contracts in the physical world can be poorly drafted as well. But courts don't usually allow ludicrous results arising from honest mistakes.
        cinntaile 4y ago
        The law doesn't care if I argue it doesn't apply to me.
      - dylan604 4y ago
  - kstrauser 4y ago
    Was this actually theft? The smart contract basically said “ask and you shall receive”. I’m trying to think of a banking analogy. Maybe their website has a page that says “enter your checking account number to get $1,000”, but the web service had the authorization code commented out. If someone discovers that and tells their friends, have they stolen from the bank? Note that I’m thinking of “theft” and “stealing” from a legal point of view. The moral angle may be very different.
    - misnome 4y ago
      Yes, I imagine that would be counted as stealing, if it wasn't intended. However, if the bank had spent large amounts of time absolutely promising irreversible transactions, and publicly opened itself to attackers, then - no, that's just an intended operation of the system.
    - johnbellone 4y ago
      This is akin to going to an ATM and finding a bug that lets you withdraw money out using the information from a receipt that someone threw out in the trash bin. It is definitely illegal.
    - mathattack 4y ago
      If you find a way to get the ATM to spit out $100K to you by mistake, legally you have to pay it back. Same if it’s the bank’s error.
      - googlryas 4y ago
        Sure, but banks and ATMs have never declared that code is law
        Fargoan 4y ago
        Has Nomad ever said "code is law"? I really doubt they did.
    - badpun 4y ago
      I'm not sure if it's theft but they most certainly have to give the money back. It's just an honest mistake, an equivalent to accidentally dropping a wallet full of cash on the street.
  - mach5 4y ago
    to be fair it's really funny
  - doix 4y ago
    Is it theft? If you go by the whole "code is law" (is that still a popular catch phrase? I don't keep up with crypto much anymore), then this is not theft. The contract let this happen, so it's legal. Edit: heh, I see a lot of HN had the exact same thought process and we all commented at the same time. I'll leave this up anyway.
  - Test0129 4y ago
    There is a reason technology that requires high levels of stability is mired in layers of approval, review, regulation, etc. It doesn't change much if at all once it works, because the probability of introducing a failure mode is so high with software. There's a point where this level of of negligence should rise to criminal liability, no different than if someone wrote code for a new boeing that was so bad it moves beyond incompetence. We are at this point, and crypto companies need to be held criminally liable for these hacks. If not at least, should be required to carry insurance and pass stringent security audits no different than other high value systems. This is pathetic, and it's not the first time, second time, or third time it happens. I do hope crypto dies. It's been co-opted by grifters and thieves, and even when it's not, grifters and thieves end up stealing the money anyway through hacks like this. Things like this could be somewhat remedied by teaching people to refuse to deal with coins that do not post several independently verifiable third party security audits but alas people don't care anyway.
  - Night_Thastus 4y ago
    I have no sympathy for the end of a speculative trade engine that's been almost exclusively used to scam people. Watch the "Line Goes Up" video, it explains it very well. It's not perfect, but provides plenty of background on crypto in general. (Despite the title)
  - simonh 4y ago
    It's horrible technology, born from deeply misguided ideals that will hurt and is hurting a lot of people. I'm not going to celebrate it's repeated, persistent failures but I'm not going to deplore them either.
  - upupandup 4y ago
    But what about ppl who are trying to get rich off the downfall of others savings? This is web3, crypto
  - oneoff786 4y ago
    It’s like the story of the three little pigs except they just keep trying the straw houses and blaming the wolves
  - crest 4y ago
    Oh cry me a river. This is criminals applying the codified "law" against each-other for their temporary enrichment and the entertainment of the spectators.
  - dang 4y ago
    Please don't respond to a bad comment by breaking the site guidelines yourself. It only makes things worse. Especially please don't cross into personal attack. We ban accounts that do that. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html Edit: since you've actually been doing that a whole bunch recently, I've banned the account. Can you please not create accounts to break HN's rules with?
- deleted 4y ago
  [deleted]
- Kiro 4y ago
  Web3 is all about these heists. That's what makes it fun and interesting. We're living the cyberpunk dream.
  - wollsmoth 4y ago
    I do really enjoy reading about these heists and it does seem like a lot of fun.
- dagw 4y ago
  No! We need more "web3 nonsense" like this. This is the closest the internet has felt to the cyberpunk dreams of the 90s. Outlaw Hackers exploiting bugs in automated smart contract to hijack cryptocurrency is the future Gibson promised us.
  - wishfish 4y ago
    True, but it's funny how all these hijinks seemed so cool in the books. Jacking in while in a grimy Tokyo nightclub as your friend, the assassin with razorblades, watches your back. But in reality, it's just all so pathetic. Sometimes I feel like a cyberpunk fan in 1988 found a monkey's paw. Made a wish that it would all come true. And it did, but in a much more banal & sad way than the fan would have thought possible.
    - rchaud 4y ago
      Replace the Tokyo nightclub with an air-conditioned military intelligence office in Pyongyang, where crypto is flooding in via ransomware payments and web3 exploits. That's the reality and it would still be quite sensational....as a Tom Clancy novel.
      - woodruffw 4y ago
        Do you have evidence that North Korea makes up any significant amount of "Web3" exploits? From my vantage point, it seems to be mostly bored twentysomethings.
        danielvf 4y ago
        I don't think this one was North Korea. And yes, most aren't. North Korean cryptocurrency hacks are a bit distinctive. Rather than finding logical bugs in contracts, they tend to use traditional spearphishing / social eng to get targeted people to run malware which they try to pivot to stealing keys / access credentials. Then after a hack, most crypto hackers try to obfuscate and store their stole coins on chain somewhere. North Korea already has a large and practiced money laundering network, so after a hack the money immediately starts going to hundreds of different places in the real world, perhaps to mules or to faked accounts in Southeast Asia.
- kyruzic 4y ago
  That's like saying each train robbery during the settlement of the west was getting us one step closer to ending the settlement. If anything these heists prove interest in web3 remains high.
  - colechristensen 4y ago
    This is about like saying the Hindenburg proved the popularity of zeppelins.
    - 676234e117 4y ago
      Interesting analogy. Is this exploit a Hindenburg or a steam train wreck? It is probably both. The model of allowing governance updates from a contract owner on a bridge or rollup is not sustainable and will have to change to mitigate these kinds of risks. Whether that means crypto networks as a whole will inevitably be replaced by a central banking system is harder to agree with.
      - colechristensen 4y ago
        Crypto for banking is... mildly interesting. Not very many people have this mindset, more should. It's being sold as revolutionary, literally, being able to overthrow $x in power or to the more susceptible as a way for everyone to get rich. So people who believe in it think it's some grand revolution of freedom, and people against it just see it as scammers exploiting the foolish. What it actually is going to be is boring. Regulated like the rest of finance, centralized like the rest of finance, but with a few new features which will end up not revolutionary but "oh I guess that's nice". It will also come with weaknesses that older centralized institutions don't have that will seem ridiculous at times. It should be about as exciting as a new programming language for bankers. Like sure if you're a banking programmer you might think it's cool, but not the kind of thing that'll get superbowl ads or the topic of your uncle joe's podcast. Snarky comparisons to the Hindenburg aside, I really think things like this disaster in the long line of disasters that won't end is just another blow to the excitement of crypto which won't disappear completely or dominate but become a mundane method for the exchange of value which to the end user is only slightly different than the old ways.
- jxi 4y ago
  Bad news for you that web3 isn’t going away. That’s like wishing for REST to go away.
- Hashemm 4y ago
- rmbyrro 4y ago
  If you don't like banks and someone robs a bank, do you celebrate the robber?
  - rideontime 4y ago
    Yes, I do.
    - rightbyte 4y ago
      Armed robbery too? Or are we talking unarmed thief digging a tunnel to the vault?
    - rmbyrro 4y ago
      Interesting. So, if someone doesn't like you, a robber goes into your home, threatening you and your family, and this person celebrates in your face, you'd be O.K. with it, right?
      - rideontime 4y ago
        No, I don't see how that follows. The person who doesn't like me might be ok with it, though.
- dang 4y ago
  Please don't post flamebait to HN. It's not what this site is for, and it destroys what it is for. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html Edit: it should be obvious, but this moderation point has zero to do with how any of us feel about web3 or whatever.
  - choppaface 4y ago
    Couldn’t you send this sort of message privately? The post gained a number of replies and the sentiment that “web3 is trash” is about as commmon today as “McKinsey is trash.” I would advocate HN send warnings in private as, respectfully, public warnings look like flamebait IMO to me.
    - lelandbatey 4y ago
      Hacker News does not have a "private message" feature, so there is no way to communicate other than publicly.
      - marincounty 4y ago
    - dang 4y ago
      It's vital that such messages be public. Their most important function is to signal to the community what sorts of comments are/aren't ok here, and indeed that the site is moderated at all.
    - eastbayjake 4y ago
      > The post gained a number of replies and the sentiment that “web3 is trash” is about as commmon today as “McKinsey is trash.” Those are both low-value, ad hominem attacks that don't substantively engage with content, and they are both comments that erode the quality of discussion in our community.
OrangeMonkey 4y ago
The international obfuscated c contest has taught me that programmers can make small mistakes on purpose and its almost impossible to identify legit mistakes from malfeasance. If we have a situation where: * Its hard to tell, after the fact, 'a mistake' was a bad actor. * The programmers are, by and large, anonymous. * The benefit of making 'a mistake' could be hundreds of millions of dollars that are not easily traced. This situation seems rife for abuse and bad actors. Not saying it happened in this case. . . but how would you know?
- nubb 4y ago
  if you enjoy obfuscated c, we have this https://underhanded.soliditylang.org/ https://underhanded.soliditylang.org/
  - OrangeMonkey 4y ago
    I am 98% anti-crypto, but this is awesome. Thank you man!
    - nubb 4y ago
      i can totally get why a lot of folks are anti crypto but from a dev perspective it is REALLY a fun place. It is possible to have fun and make money AND not be a piece of shit in crypto dev.
      - OrangeMonkey 4y ago
        I don't like the industry and I believe that, in general, its existence currently is a net negative for humanity. Currently, I believe that most 'web3' and 'crypto applications' exist to drive fear of missing out leading to monetary investments in crypto by people who don't understand the risks leading to the story here (150 million lost or stolen). I think of my grandmother or uncle investing in crypto and losing their retirement savings. I personally know family members who have lost low 5 digits. Why? Because they wanted to invest because it was the future, web 3, fomo. I actually believe the world is a worst place because of crypto. Can that change in the future? 100% Does this mean that you and people who work in the industry are bad? Not at all. I've worked in industries when I was younger that - now - I think were a net negative for the world. I'd be a hypocrite to throw stones at people just trying to live... Maybe governmental regulations of this will change my view.
latchkey 4y ago
If developers could make a small mistake that caused this, imagine what could happen when The Merge goes through.
- TacticalCoder 4y ago
  > If developers could make a small mistake that caused this, imagine what could happen when The Merge goes through. I don't get your comment: Ethereum itself has worked without any issue since it came out, in 2015 (?) or so. Many smart contracts, not built by the core Ethereum devs, have been exploited, but from Ethereum's point of view everything worked flawlessly. Why would the Ethereum devs, which have create a blockchain working perfectly fine since seven years (including many upgrades), suddenly screw up the merge to PoS badly? I mean: I don't doubt we'll see many more hacks (and I don't know why so many people are so keen on putting so much money in smart contracts) but the people in charge of Ethereum itself seems to be quite competent and have a track records of several years without any exploit to prove it.
  - lesuorac 4y ago
    Not just that but if somebody bad were to happen they can hardfork like they did in the past ... https://en.wikipedia.org/wiki/The_DAO_(organization) https://en.wikipedia.org/wiki/The_DAO_(organization) https://en.wikipedia.org/wiki/Ethereum#Launch_and_the_DAO_event_(2014%E2%80%932016) https://en.wikipedia.org/wiki/Ethereum#Launch_and_the_DAO_ev... https://en.wikipedia.org/wiki/Ethereum_Classic https://en.wikipedia.org/wiki/Ethereum_Classic
  - latchkey 4y ago
    ETH had the benefit of PoW working and proven for years prior to deployment. Switching to an entirely new consensus model, that has never been done before, is complicated and a big reason why it has taken as long as it has. Furthermore, there is a giant target (huge sum of money) on ETH's back now. If you had an exploit for PoS, why would you reveal it early? As the person below also states... they could just fork and fix things, but this time, it will be a lot harder to do so without entirely destroying the value of ETH. This is a massively risky venture that takes more than just hope and prayers. As we've seen in many many hacks over the last few years, even the most competent developers can miss something crucial.
bombcar 4y ago
Apparently the coding mistake was identified and deemed "impossible to exploit": https://certificate.quantstamp.com/full/nomad https://certificate.quantstamp.com/full/nomad > QSP-19 Proving With An Empty Leaf > Recommendation: Validate that the input of the function is not empty > The Nomad team responded that "We consider it to be effectively impossible to find the preimage of the empty leaf". > We believe the Nomad team has misunderstood the issue. It is not related to finding the pre-image of the empty bytes. Instead, it is about being able to prove that empty bytes are included in the tree (empty bytes are the default nodes of a sparse Merkle tree). Therefore, anyone can call the function with an empty leaf and update the status to be proven.
- deleted 4y ago
  [deleted]
- jxi 4y ago
  Quantstamp said it was exploitable. Nomad falsely claimed it wasn’t.
  - mhluongo 4y ago
    They're two distinct issues in two distinct contracts, AFAICT.
- treis 4y ago
  It seems like it was (at least arguably) impossible to exploit until they introduced a second issue: >It turns out that during a routine upgrade, the Nomad team initialized the trusted root to be 0x00. To be clear, using zero values as initialization values is a common practice. Unfortunately, in this case it had a tiny side effect of auto-proving every message EDIT: Reading and noodling I'm 99% sure these are separate issues. The vulnerability talks about passing in an empty leaf to the prove function. But that's not what the exploit is. The exploit is using an unproven message. So they are passing in an actual leaf to prove. The problem is that unproven messages have 0x00 as root and some jabroni set 0x00 as the trusted root. So every message was treated as proven by default when it should be the opposite.
apu 4y ago
lol. lmao.
NelsonMinar 4y ago
One explanation is this wasn't a mistake at all, but rather a deliberate bug introduced to let someone steal all the money.
- brabel 4y ago
  With 150 million dollars in the line, that's actually highly plausible.
  - sva_ 4y ago
    I feel like they would have introduced a more sophisticated bug that is harder to find/exploit.
    - SomeCallMeTim 4y ago
      With a bug that's trivial to exploit, you've got hundreds of people exploiting it; with a bug that's hard to exploit, you've got maybe only yourself or your agent exploiting it. Which of the two do you think will more likely come back to haunt you? The one where any authorities investigating will need to dig up the backgrounds and connections of hundreds of blockchain addresses exploiting the transaction, or the one where only a single address exploits the transaction? Won't their attention be primarily on those idiots who try to withdraw the money in the US, say, vs that one transaction out of hundreds where someone in Barbados had their proceeds deposited into a bank and withdrawn as cash before closing the bank account (that they opened with a false identity, maybe?). When there's a single account performing the exploit, all of the investigative resources will be applied immediately to that account, making it far more likely that the account in question will be tracked up to the point of withdrawal, and potentially flagged in time to prevent such a withdrawal. With hundreds of others distracting any authorities, it becomes hundreds of times harder track down the original perp. Think of those heist movies where someone throws a handful of cash up in the air to help avoid pursuit. Same idea.
  - NaturalPhallacy 4y ago
    Completely agree, yet initializing a value to zero ain't no smoking gun.
ricardobeat 4y ago
Does this even qualify as 'hacking'? It's the equivalent of a bank having a public `GET http://bank.com/send?from=123&to=677&amount=200 http://bank.com/send?from=123&to=677&amount=200` endpoint.
- Destiner 4y ago
  If that endpoint was made public by mistake, anyone using it might be held responsible.
- rchaud 4y ago
  Kids used to call the act of editing Facebook posts via the element inspector and taking a screenshot "hacking". Considering the triviality of most web3 exploits, I think the descriptor still applies.
- edm0nd 4y ago
  I'd say it falls under exploiting/bug bounty hunting so yeah it counts as hacking.
stillbourne 4y ago
But code is law therefore this is good for bitcoin.
- cuteboy19 4y ago
  No, if enough rich people are affected we can always roll back the blockchain, just ask etherium
Analemma_ 4y ago
The funniest part of all these stories is the part where they announce that they've "notified law enforcement". Yeah, this space is all, "woohoo, we're free from the Man! Code is law!", until an exploit is found and then they have to call on the State to enforce that "no, no, we need the people with guns to undo this transaction because it's not what we meant." It's like a living demonstration of why libertarianism fails.
- 676234e117 4y ago
  This might be surprising, but not every crypto user is a pure libertarian, or believes that code is law. A significant amount of funds extracted from this exploit were from whitehat hackers who took the funds and plan to return them, to avoid them being taken by malicious actors.
- cityzen 4y ago
  There is an entertaining documentary series on HBO Max right now called The Anarchists which has the same types of scenarios. In fact in one scene a guy says, "we're anarchists, we can't call the cops!". It has some crossover with crypto as well.
ChicagoDave 4y ago
I’m still confused as to why web3 hasn’t come up with an “undo transaction” when shit like this happens.
- yieldcrv 4y ago
  the areas being bridged to often do have an undo transaction and is a real threat to a heist, which is why people try to get funds across the bridge as fast as possible, or only exploit the other side of the bridge
- Ekaros 4y ago
  The failure of these undo steps is that what if transactions downstream have already happened. Possibly with physical goods or real money. Unroll those too? And on whose cost?
shadowgovt 4y ago
Fundamentally, smart contracts as a technology are pretty doomed if their function requires the assumption of perfect code with no stop-gap when that assumption inevitably breaks. We can't expect widespread public adoption of a system like that; even lay people are too familiar with how unreliable software is.
- mw888 4y ago
  I’m not holistically recommending the currencies they were designed alongside, but I fully believe that there is a right way to build smart contract languages, and that they look a lot more like Pact or Plutus than an EVM compilable dialect. Both are functional, which means easier to read, and Pact is non-Turing complete and strictly typed, making it even easier, so much so that formal verification tools can assess what a contract is capable of automatically - a much smaller search space than EVM bytecode. When code is not permanent and backing millions of dollars or more of value, the trade offs may favor more powerful or flexible languages, but the ability to read and understand code and what it can do it so wildly important for smart contracts that I don’t see a world where Pact isn’t moving the right direction contrary to the EVM.
gadders 4y ago
Who was it who described Eth etc as "self-funding bug bounties"?
efitz 4y ago
Reason #5734 why cryptocurrency is a non starter for real people. Challenge: explain to a normie that their life savings is gone forever because of a zero initialization vector.
- gillesjacobs 4y ago
  Challenge: explain to a normie that their life savings is gone forever because of mortgage backed derivatives.
  - happytoexplain 4y ago
    Bad analogy. This explanation has actually been done pretty reasonably by a few people. Further than that - after such explanations, it's clear even to normal people who's to blame, whereas software and cryptography are much more esoteric in that department. Of course there is no justice in either case, but at least normal people can see who is most appropriate to behead in the case of the traditional financial catastrophes, in the purely theoretical revolution.
    - rmbyrro 4y ago
      What a flex you pulled off!
      - happytoexplain 4y ago
        Doesn't that mean "brag"? I don't think I'm doing that.
  - davewritescode 4y ago
    What a dumb retort If you got burned by mortgage backed derivatives and lost your life savings, it's ultimately because you were (knowingly or not) speculating on the value of real estate assets and making an assumption about future values of said assets. In the case of Nomad, it's that you put yourself at risk by using their service you could've lost everything you put in.
676234e117 4y ago
It is important that users come to better understand the different risk profiles between: 1. Owning ETH with a non-custodial wallet. 2. Owning ETH on a CEX. 3. Depositing ETH into a smart contract to receive a wrapped asset. This includes rollups and L2s. The majority of major crypto hacks[1] are in the 3rd group, and almost all of these hacks are related to protocol updates and governance. Either: the developers update their code, and accidentally push a bug, or one address or a group of addresses are allow-listed some privileged actions in the contract and that can become a weak point. Proxying and governance isn't the only way to design contracts. Two examples counter to this that are more robust are WETH ($6B) [2] and ETH2 Deposit ($20B) [3] which cannot be attacked in this way. If users wanted a new feature from the WETH contract, they would have to manually migrate over to the new address. Eventually we might see this kind of design be applied to bridges and rollups. [1] https://rekt.news/leaderboard/ https://rekt.news/leaderboard/ [2] https://etherscan.io/address/0xc02aaa39b223fe8d0a0e5c4f27ead9083c756cc2 https://etherscan.io/address/0xc02aaa39b223fe8d0a0e5c4f27ead... [3] https://etherscan.io/address/0x00000000219ab540356cbb839cbe05303d7705fa https://etherscan.io/address/0x00000000219ab540356cbb839cbe0...
rchaud 4y ago
How does this much money get 'lost' without heads rolling? I understand that some of the deposits are from retail 'investors' who are poorly organized more interested in token appreciation or yield than the safety of their funds. But even getting to $150m would take forever if it came from individuals. Surely there are large investors that provided the bulk of the capital. Shouldn't they intervene in some way? Or do these whales have so much to waste that they throw money into each of these projects knowing that they'll never see a cent back from 50% of them?
- Dma54rhs 4y ago
  Someone else here claimed they don't yet have a public token and it's all vc/institutional money.
paulpauper 4y ago
There must be thousands of people scanning contracts and defi protocols for any updates or changes and then trying to exploit it. A single exploit is equal to 1000s of years of income even at a regular tech job. This is happening every few weeks now it seems.
Fargoan 4y ago
I lost ~$400 worth of Nomad USDC in this attack AMA
- nradov 4y ago
  - deleted 4y ago
    [deleted]
  - Fargoan 4y ago
edm0nd 4y ago
Another ouch >Messages popping up in public Discord servers of random people grabbing $3K-$20K from the Nomad bridge - all one had to do was copy the first hacker's transaction and change the address, then hit send through Etherscan. In true crypto fashion - the first decentralized robbery. https://twitter.com/FatManTerra/status/1554258880380772352 https://twitter.com/FatManTerra/status/1554258880380772352
- wnevets 4y ago
  Since "code is law" doesn't that mean it wasn't a robbery? They were just following the law.
  - adrr 4y ago
    It will be interesting to see if they can prosecute people. They are called smart contracts and talked about being the actual contract.
    - vkou 4y ago
      People have been prosecuted for this sort of stuff over the past few years. 'Code is law' is just a reddit meme at this point, that has no basis in reality. 'Smart contracts' are just regular contracts, but with more opportunities for theft.
      - lottin 4y ago
        I'm pretty sure smart contracts aren't contracts. They're pieces of computer code.
  - arlcode 4y ago
    Contracts (smart or not) cannot override the law. I'm not a lawyer but I would be very surprised if courts in most countries would buy this argument. Spelling or grammatical mistakes usually don't invalidate contracts in the real world and robbing a poorly secured vault is still illegal. The thief was obviously trying to get other people's money without their consent.
mikeyouse 4y ago
All these Web3 companies have a seriously difficult problem to solve -- you want to hire the best and brightest engineers to really lock-down your systems, but how would you prevent a core dev from 'accidentally' enabling some obscure attack and then going home that night and exploiting it? Hackers here are going to clear tens of millions of dollars.. an A++ rockstar engineer maybe makes $1M/year in total comp? How would you ever prevent insider attacks? How can you or the police tell the difference between a coding mistake and an intentional exploit?
- latchkey 4y ago
  multisig. no different than any other large company. Even our finance department uses multiple real signatures to sign off on large invoices.
  - mikeyouse 4y ago
    As does ours - but they manually review things to give them a 'sense check'. That doesn't scale at all to the crypto world where the concept is permissionless and instant transfers. Said differently, how would you implement multisig in a setup like Nomad and prevent this type of attack?
    - latchkey 4y ago
      I've been harping on this part of DeFi for a long time... developers should be writing very good tests. Along with that, security reviews should be followed. This is the review in question [1] where developers ignored the possibility of an issue. This is the commit [2] that likely caused the issue, no tests added. Along with a large chunk of "never brag about your security" hubris [3]. [1] https://news.ycombinator.com/item?id=32319344 https://news.ycombinator.com/item?id=32319344 [2] https://github.com/nomad-xyz/monorepo/commit/46d14571f3eada6ecf9ffce8fdc3adea11e73031#diff-45141e17961c00f6e486db12a2155e88d1c5e6dbc66410c62e37f9eb1e312e32L193-R187 https://github.com/nomad-xyz/monorepo/commit/46d14571f3eada6... [3] https://twitter.com/0xemon/status/1554310755071119361 https://twitter.com/0xemon/status/1554310755071119361
Ekaros 4y ago
So how come there was 150 million in this? Haven't the people "investing" done their due diligence and reviewed the code? Shouldn't that be the expected behaviour like we all do with transitive dependencies?
- rmbyrro 4y ago
  They've exercised the same diligence as usual [1] [1] https://en.wikipedia.org/wiki/Madoff_investment_scandal https://en.wikipedia.org/wiki/Madoff_investment_scandal
- yieldcrv 4y ago
  The contract was fine until an upgrade Often times the market doesn’t like upgradeable contracts for this reason, ironically the misunderstood idea of smart contracts not being upgradeable is paraded as a bug but its all situational
washbrain 4y ago
Anyone who unironically believes "code is law" or "code is the contact" should be taking a hard look at this and realizing how terrible those ideas are.
- shadycuz 4y ago
  Really? Even with all the data showing how biased Human judges are? At my day job, I automate everything because humans can't reliably perform basic tasks. I'm not a believer in web3 or crypto but believe computers to be more impartial and would rather see them eventually take over certain aspects of legal work.
  - washbrain 4y ago
    Judges are there to provide judgement. It's literally in the name. Judges are deliberately put in positions to make nuanced decisions. Yes, bias exists, but the solution isn't dogmatic and inflexible application of law.
malkia 4y ago
Apart from blockchain, nft, crypto, web3 - is Solidity, the language, worth exploring - can it be used (for fun) outside it's main purpose? Just curious...
- danielvf 4y ago
  As someone who writes Solidity full time - it's probably not useful for anything outside its current use case. The EVM, that it compiles to is a lot of fun though, if you like small understandable virtual machines. I like it a lot.
  - malkia 4y ago
    Thanks - I took a brief look, but as soon as I saw certain crypto/eth specific things into decided not to go further (at least for now). Personally I'm very skeptical of everything crypto, but with time it may get to some better goals. It's not the technology really that detracts me, but it's use.
- doopy1 4y ago
  It can be used for fun if you find EVM development fun.
rhacker 4y ago
What's Web3?
- superjan 4y ago
  Or Moonbeam? Replica? WBTC? acceptableRoot()? I don’t get any of this. If I get it correctly, Web3 would use crypto technology to let you buy a digital costume that get to wear both while playing fortnite and on Facebook when chilling online with your real friends, that is unless fb switches to building a tiktok clone because it is easier money than the “metaverse”.
- deleted 4y ago
  [deleted]
civilized 4y ago
I know next to nothing about crypto, but I do know this is not the first time I've heard of a huge crypto hack involving security flaws in something called a "bridge". People should look into those!
throitallaway 4y ago
Off topic, but I refuse to read stuff like this in tweet format. It's nice that threadreader exists, but this short format shit has to go.
what-imright 4y ago
Are you kidding me? They lost 150 million dollars and the only penalty is to write up the bug on twitter? These children are playing with peoples lives. There’s a body count to losing that much money
- yieldcrv 4y ago
  People are often in a prisoner’s dilemma, where they are relying on the developers/team to spearhead the investigation including the judicial investigation against the perpetrators with the chance of their being a financial remedy and so therefore nobody is trying to kill or impair the developers/team if you were referring to people committing suicide or being suicided by the people they borrowed money from, thats not everyone’s problem and people in those circumstances should re-evaluate to avoid that risk or accept that risk
- andrewia 4y ago
  This is a really severe heist, but the latter part of your comment seems rather dramatic. Crypto is still generally not a medium of exchange, and most users are still speculative investors. Most of these investors have a hedge (or are using crypto as their hedge), except for the foolish.
  - sosodev 4y ago
    Most perhaps, but stories of people committing suicide after every crypto crash are far too common...
  - fanf2 4y ago
    But when someone wisely observes that crypto is useless for anything except scams, some cryptoenthusiast answers, but no, it is useful as a medium of exchange for people in third world countries with difficult foreign exchange restrictions.
  - perlgeek 4y ago
    There a monetary value you can attach to a human's life, as much as that seems to be taboo. Depending on how you measure, that value is (in the US and Europe) typically in the order of 1..5 Mio USD. So it's not outrageous to assume that losing 150m comes with a body count, even if the funds wouldn't have bee used to directly save or improve lives otherwise.
woah 4y ago
The reason this happened is that Nomad's contract was "upgradable". This is a pattern where the source code of a contract is able to be replaced by a privileged developer account. This was not how Ethereum was intended to work and it actually needs some pretty convoluted stuff to make it work (see the UpgradeBeacon related code here: https://etherscan.io/address/0x88a69b4e698a4b090df6cf5bd7b2d47325ad30a3#code https://etherscan.io/address/0x88a69b4e698a4b090df6cf5bd7b2d...) The reason developers make their contracts "upgradable" is simple greed- they want to be able to launch more quickly than other projects without needing to ensure their code will stand the test of time. This may be OK for a social networking app MVP, but it's not OK for a smart contract which a user ideally should be able to audit and understand (or at least rely on the audit of someone else). "Upgradable" smart contracts can always be changed after the fact, as happened here, which means that any audit is meaningless. Top tier projects still do use simple un-upgradable smart contracts. Uniswap first wrote v1, then improved it and launched v2, then v3. The Uniswap v1 and v2 contracts are still running and usable, and will be for as long as Ethereum is around. Their security properties will always be the same as they were the day they launched. "Upgradable" contracts mean that you are trusting your money to some anonymous fat fingered (or at worst, criminal) dev, and it could disappear at any minute. They defeat the entire purpose of even using a blockchain.
- artdigital 4y ago
  Yes - but not having them upgradeable means that if your contract is dealing with a lot of money and a small bug was discovered, you are unable to patch it after the fact, even if people are actively abusing that bug It’s not really about greed. Deploying a program and having it unchangeable forever comes with risks, and more often when dealing with very complex applications, those aren’t worth it
  - cypress66 4y ago
    People should NEVER touch any upgradable contract. It is literally centralized, and defeats the whole purpose of DeFi. Yes, writing perfect code is very hard. But smart contracts are an example of code that must be extremely thoroughly tested, formally verified and so on. But that doesn't go well with being first to market, move fast break things, etc.
drcongo 4y ago
I don't understand why people writing smart contracts don't also write tests.
skeeter2020 4y ago
I'm not smart enough to follow all the jargon and references in this tweet stream, but then I also didn't loose $150M so we'll call it a wash.
ChrisMarshallNY 4y ago
I liked the visualization...
saurabh20n 4y ago
For the curious, here are direct links: * Initialization was done 42 days ago: https://etherscan.io/tx/0x53fd92771d2084a9bf39a6477015ef53b7f116c79d98a21be723d06d79024cad https://etherscan.io/tx/0x53fd92771d2084a9bf39a6477015ef53b7... -- "Click to see More" and notice "Input Data" parameter [2] which sets _committedRoot to 0x00. * Click through the To contract to get to the code (click on Contract tab): https://etherscan.io/address/0xb92336759618f55bd0f8313bd843604592e27bd8#code https://etherscan.io/address/0xb92336759618f55bd0f8313bd8436... Just adding direct links to what samczsun and 0xfoobar are talking about in https://twitter.com/samczsun/status/1554260106107179010 https://twitter.com/samczsun/status/1554260106107179010 and https://twitter.com/0xfoobar/status/1554269071214088193/photo/2 https://twitter.com/0xfoobar/status/1554269071214088193/phot...
indigodaddy 4y ago
I know literally 0 about crypto so please communicate as if I were a 5th grader (actually they may perhaps be more knowledgeable than I). Any chance for the exploiters to be prosecuted, or is it essentially all anonymous?
- che_shirecat 4y ago
  alot of the exploit wallets are doxxed, e.g. they have an initial deposit into wallet from a centralized crypto exchange like coinbase or FTX that investigators can request info from. its actually pretty hard to get a "clean" wallet, and even if you have one, mixing the crypto back out to fiat is tricky as well. what's worse, all transactions are permanently on the blockchain so if they don't catch you now they can always catch you later.
- MBCook 4y ago
  Trying to speculate my immediate question is: what court gets jurisdiction over this and why? * The one where the investor lives? * The alleged thief? * The creators of the contract? * Some 4th option?
tmpz22 4y ago
Everytime I see a story like this I wonder if the exploit was left intentionally for the founders and developers to exploit one way or another. Even if they themselves do not take the money it would be trivial to sell the exploit for some form of delayed (and more easy to launder) payment.
yuan43 4y ago
> tl;dr a routine upgrade marked the zero hash as a valid root, which had the effect of allowing messages to be spoofed on Nomad. Attackers abused this to copy/paste transactions and quickly drained the bridge in a frenzied free-for-all From this explainer: > It’s [Nomad is] built to address security first The Nomad team has been building secure bridges as a team for 4+ years and has studied the pitfalls of multi-sig and validator-based bridges. https://medium.com/imperator-guide/nomad-a-cross-chain-interoperability-protocol-for-generalized-message-passing-2f7a916df3f0 https://medium.com/imperator-guide/nomad-a-cross-chain-inter... Assuming this is true, and assuming the team is not incompetent or composed of the typical grifters, perhaps it's time to draw the inevitable conclusion. No amount of experience is sufficient to safeguard an Ethereum protocol of any interesting complexity. It's a reasonable question to ask, WTF is Nomad for? After all, isn't Ethereum supposed to be the World Computer, Turing complete and ready for any task? Nope. Never was. I think a good chunk of the answer can be found on the home page: > Nomad reduces gas fees by a factor of 10x relative to traditional header relay systems, while remaining decentralized. https://www.nomad.xyz https://www.nomad.xyz That world computer is choked to the gills with accumulated waste. The proliferation of chains is the response. Each one is less secure than its forebear. Gobbledygook like Nomad is the "connective tissue" to get the various organs of this science project talking to each other. Dive deeply enough down and you find the root of it all: everybody wants to make the next Bitcoin, Ethereum, Cardano, Polkadot, and so on. With each turn of the crank a new crop of Barnums springs up to take the money of an unending supply of digital rubes.
woojoo666 4y ago
Im starting to get the feeling that security by obscurity is a good thing. There's a reason why banks don't open source their infra, or why Google/Facebook/Twitter don't open source their algorithms. No matter how smart your engineers are, they are going to make mistakes, and if the incentive is high enough then people will find and exploit those mistakes. It's honestly amazing that L1 blockchains (like bitcoin, ethereum, monero) have lasted this long at all
- cypress66 4y ago
  The difference isn't open vs closed source. The difference is that banks can reverse stuff.
zxspectrum1982 4y ago
How can Nomad afford to lose $150M and go on like nothing happened? Same for other exchanges which have lost hundreds of millions. It seems really weird. Any real-world company which would lose $150M would have a lot of pressure on it, investigations, dismissals, etc.
philippz 4y ago
Pity to see. Nomad's team is a really strong one, and their cross-chain bridge design is one of the best out there.

301 points by onion2k 4y ago

rapsey 4y ago

Well done and congrats to the hackers. One step closer of ridding the world of web3 nonesense.

Fargoan 4y ago
- doopy1 4y ago
  Welcome to HN, where crypto is the devil and must be eradicated at all costs. Anyone who thinks otherwise here is either perceived to be an idiot or a grifter.
  - rjbwork 4y ago
    It should, perhaps, tell you something that a community with one of the most highly concentrated populations of technically literate people on the internet are so vehemently against a technology. Crypto is just a paperclip maximizer for silicon and electrons that does what traditional companies have been doing for at least 60 years. Only 100000x less efficiently.
    - sneak 4y ago
      This community is nowhere near consensus on this matter. A small minority of loud naysayers is.
      - rjbwork 4y ago
        I don't think it is a minority. In my personal and work life, it does seem to be something like 80/20 or 90/10. You might be right though, it's impossible to tell without doing some kind of vaguely rigorous poll.
      - JumpCrisscross 4y ago
        > This community is nowhere near consensus on this matter. A small minority of loud naysayers is There's an information bubble. It's not the crypto skeptics. There's a reason when governments around the world have moved to ban crypto there's been little to no popular resistance beyond angry 4channers.
        sneak 4y ago
        Substantually more governments have invested time, money, and regulatory effort into the crypto ecosystem than have banned it. The facts don't support the narrative to which you seem to be attached. a16z is a large investor in the space and proponent, as well as several other prominent tech investment firms. Are they angry 4channers? It's ok to be personally against it, but please don't misrepresent the facts.
        JumpCrisscross 4y ago
        > more governments have invested time, money, and regulatory effort into the crypto ecosystem than have banned it Lots of chatting. Looking at actual dollars and laws, we're weighing the elephants of China, India and increasingly the EU against...Singapore, El Salvador and Malta? Outside young men, disproportionately minorities, crypto has a limited beachhead [1]. It was an easy money phenomena with historic comparison. We're now seeing the regulatory mood shifting decisively against it with limited competent pushback. > a16z is a large investor in the space and proponent They're notable for where they're prominent and where they're not. Aggressive fundraising followed by SoftBank/Tiger style deployment. Tweets and blog posts galore. Yet middling returns, even on an internal basis, and absolutely zero presence worth mentioning in D.C. I'm no greybeard. But I've worked in finance long enough to see the game they're playing. [1] https://www.pewresearch.org/fact-tank/2021/11/11/16-of-americans-say-they-have-ever-invested-in-traded-or-used-cryptocurrency/ https://www.pewresearch.org/fact-tank/2021/11/11/16-of-ameri...
    - FabHK 4y ago
      > Only 100000x less efficiently. You're being too kind to crypto there, I think, by a few orders of magnitude.
      - yarg 4y ago
        Only 2^200 times less efficiently (even that's generous).
        FabHK 4y ago
        I'd say between 1e7 and 1e11. 1e5 is too generous, 1e60 is way too harsh.
        yarg 4y ago
        When a fundamental part of token generation is brute-forcing secure hashes?
        FabHK 4y ago
        Yes, but you still need, say, one computer to run what Bitcoin does (without the PoW hashing - just checking and recording 5 transactions per second). BTC uses around 15 GW currently, a computer say 15 to 150 W, so we are talking a factor of 1e9 (Giga) to 1e10.
  - Ekaros 4y ago
    Actually yes. I think crypto promoters are either idiots or grifters...
- Jerrrry 4y ago
  Non Sequitur. You can do both logically. You are a horrible convincer.
- endisneigh 4y ago
  This is terrible obviously, but if code is law and someone writes bad code and exploits that is it “illegal”? The entire basis of even having judges, courts, etc is an acknowledgment that the “code” is imperfect and certain circumstances require human intervention. Going without that is, well… YMMV.
  - Fargoan 4y ago
    Code is law is just a meme
    - misnome 4y ago
      Isn't it a consequence? If the entire foundation of your system is irreversibility and finality, then doesn't it effective becomes true? (unless you are big enough to force a network-wide rollback...).
      - cinntaile 4y ago
        If you ignore the fact that the actual law might have something to say about this, then sure.
        ghaff 4y ago
        But that's exactly what the decentralized crowd is arguing. You encode transactions and no centralized authority (e.g. a country's judicial system backed by people with guns) can override it. A natural consequence is that no one can override a mistake either. Legal contracts in the physical world can be poorly drafted as well. But courts don't usually allow ludicrous results arising from honest mistakes.
        cinntaile 4y ago
        The law doesn't care if I argue it doesn't apply to me.
    - dylan604 4y ago
- kstrauser 4y ago
  Was this actually theft? The smart contract basically said “ask and you shall receive”. I’m trying to think of a banking analogy. Maybe their website has a page that says “enter your checking account number to get $1,000”, but the web service had the authorization code commented out. If someone discovers that and tells their friends, have they stolen from the bank? Note that I’m thinking of “theft” and “stealing” from a legal point of view. The moral angle may be very different.
  - misnome 4y ago
    Yes, I imagine that would be counted as stealing, if it wasn't intended. However, if the bank had spent large amounts of time absolutely promising irreversible transactions, and publicly opened itself to attackers, then - no, that's just an intended operation of the system.
  - johnbellone 4y ago
    This is akin to going to an ATM and finding a bug that lets you withdraw money out using the information from a receipt that someone threw out in the trash bin. It is definitely illegal.
  - mathattack 4y ago
    If you find a way to get the ATM to spit out $100K to you by mistake, legally you have to pay it back. Same if it’s the bank’s error.
    - googlryas 4y ago
      Sure, but banks and ATMs have never declared that code is law
      - Fargoan 4y ago
        Has Nomad ever said "code is law"? I really doubt they did.
  - badpun 4y ago
    I'm not sure if it's theft but they most certainly have to give the money back. It's just an honest mistake, an equivalent to accidentally dropping a wallet full of cash on the street.
- mach5 4y ago
  to be fair it's really funny
- doix 4y ago
  Is it theft? If you go by the whole "code is law" (is that still a popular catch phrase? I don't keep up with crypto much anymore), then this is not theft. The contract let this happen, so it's legal. Edit: heh, I see a lot of HN had the exact same thought process and we all commented at the same time. I'll leave this up anyway.
- Test0129 4y ago
  There is a reason technology that requires high levels of stability is mired in layers of approval, review, regulation, etc. It doesn't change much if at all once it works, because the probability of introducing a failure mode is so high with software. There's a point where this level of of negligence should rise to criminal liability, no different than if someone wrote code for a new boeing that was so bad it moves beyond incompetence. We are at this point, and crypto companies need to be held criminally liable for these hacks. If not at least, should be required to carry insurance and pass stringent security audits no different than other high value systems. This is pathetic, and it's not the first time, second time, or third time it happens. I do hope crypto dies. It's been co-opted by grifters and thieves, and even when it's not, grifters and thieves end up stealing the money anyway through hacks like this. Things like this could be somewhat remedied by teaching people to refuse to deal with coins that do not post several independently verifiable third party security audits but alas people don't care anyway.
- Night_Thastus 4y ago
  I have no sympathy for the end of a speculative trade engine that's been almost exclusively used to scam people. Watch the "Line Goes Up" video, it explains it very well. It's not perfect, but provides plenty of background on crypto in general. (Despite the title)
- simonh 4y ago
  It's horrible technology, born from deeply misguided ideals that will hurt and is hurting a lot of people. I'm not going to celebrate it's repeated, persistent failures but I'm not going to deplore them either.
- upupandup 4y ago
  But what about ppl who are trying to get rich off the downfall of others savings? This is web3, crypto
- oneoff786 4y ago
  It’s like the story of the three little pigs except they just keep trying the straw houses and blaming the wolves
- crest 4y ago
  Oh cry me a river. This is criminals applying the codified "law" against each-other for their temporary enrichment and the entertainment of the spectators.
- dang 4y ago
  Please don't respond to a bad comment by breaking the site guidelines yourself. It only makes things worse. Especially please don't cross into personal attack. We ban accounts that do that. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html Edit: since you've actually been doing that a whole bunch recently, I've banned the account. Can you please not create accounts to break HN's rules with?
deleted 4y ago
[deleted]
Kiro 4y ago
Web3 is all about these heists. That's what makes it fun and interesting. We're living the cyberpunk dream.
- wollsmoth 4y ago
  I do really enjoy reading about these heists and it does seem like a lot of fun.
dagw 4y ago
No! We need more "web3 nonsense" like this. This is the closest the internet has felt to the cyberpunk dreams of the 90s. Outlaw Hackers exploiting bugs in automated smart contract to hijack cryptocurrency is the future Gibson promised us.
- wishfish 4y ago
  True, but it's funny how all these hijinks seemed so cool in the books. Jacking in while in a grimy Tokyo nightclub as your friend, the assassin with razorblades, watches your back. But in reality, it's just all so pathetic. Sometimes I feel like a cyberpunk fan in 1988 found a monkey's paw. Made a wish that it would all come true. And it did, but in a much more banal & sad way than the fan would have thought possible.
  - rchaud 4y ago
    Replace the Tokyo nightclub with an air-conditioned military intelligence office in Pyongyang, where crypto is flooding in via ransomware payments and web3 exploits. That's the reality and it would still be quite sensational....as a Tom Clancy novel.
    - woodruffw 4y ago
      Do you have evidence that North Korea makes up any significant amount of "Web3" exploits? From my vantage point, it seems to be mostly bored twentysomethings.
      - danielvf 4y ago
        I don't think this one was North Korea. And yes, most aren't. North Korean cryptocurrency hacks are a bit distinctive. Rather than finding logical bugs in contracts, they tend to use traditional spearphishing / social eng to get targeted people to run malware which they try to pivot to stealing keys / access credentials. Then after a hack, most crypto hackers try to obfuscate and store their stole coins on chain somewhere. North Korea already has a large and practiced money laundering network, so after a hack the money immediately starts going to hundreds of different places in the real world, perhaps to mules or to faked accounts in Southeast Asia.
kyruzic 4y ago
That's like saying each train robbery during the settlement of the west was getting us one step closer to ending the settlement. If anything these heists prove interest in web3 remains high.
- colechristensen 4y ago
  This is about like saying the Hindenburg proved the popularity of zeppelins.
  - 676234e117 4y ago
    Interesting analogy. Is this exploit a Hindenburg or a steam train wreck? It is probably both. The model of allowing governance updates from a contract owner on a bridge or rollup is not sustainable and will have to change to mitigate these kinds of risks. Whether that means crypto networks as a whole will inevitably be replaced by a central banking system is harder to agree with.
    - colechristensen 4y ago
      Crypto for banking is... mildly interesting. Not very many people have this mindset, more should. It's being sold as revolutionary, literally, being able to overthrow $x in power or to the more susceptible as a way for everyone to get rich. So people who believe in it think it's some grand revolution of freedom, and people against it just see it as scammers exploiting the foolish. What it actually is going to be is boring. Regulated like the rest of finance, centralized like the rest of finance, but with a few new features which will end up not revolutionary but "oh I guess that's nice". It will also come with weaknesses that older centralized institutions don't have that will seem ridiculous at times. It should be about as exciting as a new programming language for bankers. Like sure if you're a banking programmer you might think it's cool, but not the kind of thing that'll get superbowl ads or the topic of your uncle joe's podcast. Snarky comparisons to the Hindenburg aside, I really think things like this disaster in the long line of disasters that won't end is just another blow to the excitement of crypto which won't disappear completely or dominate but become a mundane method for the exchange of value which to the end user is only slightly different than the old ways.
jxi 4y ago
Bad news for you that web3 isn’t going away. That’s like wishing for REST to go away.
Hashemm 4y ago
rmbyrro 4y ago
If you don't like banks and someone robs a bank, do you celebrate the robber?
- rideontime 4y ago
  Yes, I do.
  - rightbyte 4y ago
    Armed robbery too? Or are we talking unarmed thief digging a tunnel to the vault?
  - rmbyrro 4y ago
    Interesting. So, if someone doesn't like you, a robber goes into your home, threatening you and your family, and this person celebrates in your face, you'd be O.K. with it, right?
    - rideontime 4y ago
      No, I don't see how that follows. The person who doesn't like me might be ok with it, though.
dang 4y ago
Please don't post flamebait to HN. It's not what this site is for, and it destroys what it is for. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html Edit: it should be obvious, but this moderation point has zero to do with how any of us feel about web3 or whatever.
- choppaface 4y ago
  Couldn’t you send this sort of message privately? The post gained a number of replies and the sentiment that “web3 is trash” is about as commmon today as “McKinsey is trash.” I would advocate HN send warnings in private as, respectfully, public warnings look like flamebait IMO to me.
  - lelandbatey 4y ago
    Hacker News does not have a "private message" feature, so there is no way to communicate other than publicly.
    - marincounty 4y ago
  - dang 4y ago
    It's vital that such messages be public. Their most important function is to signal to the community what sorts of comments are/aren't ok here, and indeed that the site is moderated at all.
  - eastbayjake 4y ago
    > The post gained a number of replies and the sentiment that “web3 is trash” is about as commmon today as “McKinsey is trash.” Those are both low-value, ad hominem attacks that don't substantively engage with content, and they are both comments that erode the quality of discussion in our community.

OrangeMonkey 4y ago

The international obfuscated c contest has taught me that programmers can make small mistakes on purpose and its almost impossible to identify legit mistakes from malfeasance. If we have a situation where: * Its hard to tell, after the fact, 'a mistake' was a bad actor. * The programmers are, by and large, anonymous. * The benefit of making 'a mistake' could be hundreds of millions of dollars that are not easily traced. This situation seems rife for abuse and bad actors. Not saying it happened in this case. . . but how would you know?

nubb 4y ago
if you enjoy obfuscated c, we have this https://underhanded.soliditylang.org/ https://underhanded.soliditylang.org/
- OrangeMonkey 4y ago
  I am 98% anti-crypto, but this is awesome. Thank you man!
  - nubb 4y ago
    i can totally get why a lot of folks are anti crypto but from a dev perspective it is REALLY a fun place. It is possible to have fun and make money AND not be a piece of shit in crypto dev.
    - OrangeMonkey 4y ago
      I don't like the industry and I believe that, in general, its existence currently is a net negative for humanity. Currently, I believe that most 'web3' and 'crypto applications' exist to drive fear of missing out leading to monetary investments in crypto by people who don't understand the risks leading to the story here (150 million lost or stolen). I think of my grandmother or uncle investing in crypto and losing their retirement savings. I personally know family members who have lost low 5 digits. Why? Because they wanted to invest because it was the future, web 3, fomo. I actually believe the world is a worst place because of crypto. Can that change in the future? 100% Does this mean that you and people who work in the industry are bad? Not at all. I've worked in industries when I was younger that - now - I think were a net negative for the world. I'd be a hypocrite to throw stones at people just trying to live... Maybe governmental regulations of this will change my view.

latchkey 4y ago

If developers could make a small mistake that caused this, imagine what could happen when The Merge goes through.

TacticalCoder 4y ago
> If developers could make a small mistake that caused this, imagine what could happen when The Merge goes through. I don't get your comment: Ethereum itself has worked without any issue since it came out, in 2015 (?) or so. Many smart contracts, not built by the core Ethereum devs, have been exploited, but from Ethereum's point of view everything worked flawlessly. Why would the Ethereum devs, which have create a blockchain working perfectly fine since seven years (including many upgrades), suddenly screw up the merge to PoS badly? I mean: I don't doubt we'll see many more hacks (and I don't know why so many people are so keen on putting so much money in smart contracts) but the people in charge of Ethereum itself seems to be quite competent and have a track records of several years without any exploit to prove it.
- lesuorac 4y ago
  Not just that but if somebody bad were to happen they can hardfork like they did in the past ... https://en.wikipedia.org/wiki/The_DAO_(organization) https://en.wikipedia.org/wiki/The_DAO_(organization) https://en.wikipedia.org/wiki/Ethereum#Launch_and_the_DAO_event_(2014%E2%80%932016) https://en.wikipedia.org/wiki/Ethereum#Launch_and_the_DAO_ev... https://en.wikipedia.org/wiki/Ethereum_Classic https://en.wikipedia.org/wiki/Ethereum_Classic
- latchkey 4y ago
  ETH had the benefit of PoW working and proven for years prior to deployment. Switching to an entirely new consensus model, that has never been done before, is complicated and a big reason why it has taken as long as it has. Furthermore, there is a giant target (huge sum of money) on ETH's back now. If you had an exploit for PoS, why would you reveal it early? As the person below also states... they could just fork and fix things, but this time, it will be a lot harder to do so without entirely destroying the value of ETH. This is a massively risky venture that takes more than just hope and prayers. As we've seen in many many hacks over the last few years, even the most competent developers can miss something crucial.

bombcar 4y ago

Apparently the coding mistake was identified and deemed "impossible to exploit": https://certificate.quantstamp.com/full/nomad https://certificate.quantstamp.com/full/nomad > QSP-19 Proving With An Empty Leaf > Recommendation: Validate that the input of the function is not empty > The Nomad team responded that "We consider it to be effectively impossible to find the preimage of the empty leaf". > We believe the Nomad team has misunderstood the issue. It is not related to finding the pre-image of the empty bytes. Instead, it is about being able to prove that empty bytes are included in the tree (empty bytes are the default nodes of a sparse Merkle tree). Therefore, anyone can call the function with an empty leaf and update the status to be proven.

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jxi 4y ago
Quantstamp said it was exploitable. Nomad falsely claimed it wasn’t.
- mhluongo 4y ago
  They're two distinct issues in two distinct contracts, AFAICT.
treis 4y ago
It seems like it was (at least arguably) impossible to exploit until they introduced a second issue: >It turns out that during a routine upgrade, the Nomad team initialized the trusted root to be 0x00. To be clear, using zero values as initialization values is a common practice. Unfortunately, in this case it had a tiny side effect of auto-proving every message EDIT: Reading and noodling I'm 99% sure these are separate issues. The vulnerability talks about passing in an empty leaf to the prove function. But that's not what the exploit is. The exploit is using an unproven message. So they are passing in an actual leaf to prove. The problem is that unproven messages have 0x00 as root and some jabroni set 0x00 as the trusted root. So every message was treated as proven by default when it should be the opposite.

apu 4y ago

lol. lmao.

NelsonMinar 4y ago

One explanation is this wasn't a mistake at all, but rather a deliberate bug introduced to let someone steal all the money.

brabel 4y ago
With 150 million dollars in the line, that's actually highly plausible.
- sva_ 4y ago
  I feel like they would have introduced a more sophisticated bug that is harder to find/exploit.
  - SomeCallMeTim 4y ago
    With a bug that's trivial to exploit, you've got hundreds of people exploiting it; with a bug that's hard to exploit, you've got maybe only yourself or your agent exploiting it. Which of the two do you think will more likely come back to haunt you? The one where any authorities investigating will need to dig up the backgrounds and connections of hundreds of blockchain addresses exploiting the transaction, or the one where only a single address exploits the transaction? Won't their attention be primarily on those idiots who try to withdraw the money in the US, say, vs that one transaction out of hundreds where someone in Barbados had their proceeds deposited into a bank and withdrawn as cash before closing the bank account (that they opened with a false identity, maybe?). When there's a single account performing the exploit, all of the investigative resources will be applied immediately to that account, making it far more likely that the account in question will be tracked up to the point of withdrawal, and potentially flagged in time to prevent such a withdrawal. With hundreds of others distracting any authorities, it becomes hundreds of times harder track down the original perp. Think of those heist movies where someone throws a handful of cash up in the air to help avoid pursuit. Same idea.
- NaturalPhallacy 4y ago
  Completely agree, yet initializing a value to zero ain't no smoking gun.

ricardobeat 4y ago

Does this even qualify as 'hacking'? It's the equivalent of a bank having a public `GET http://bank.com/send?from=123&to=677&amount=200 http://bank.com/send?from=123&to=677&amount=200` endpoint.

Destiner 4y ago
If that endpoint was made public by mistake, anyone using it might be held responsible.
rchaud 4y ago
Kids used to call the act of editing Facebook posts via the element inspector and taking a screenshot "hacking". Considering the triviality of most web3 exploits, I think the descriptor still applies.
edm0nd 4y ago
I'd say it falls under exploiting/bug bounty hunting so yeah it counts as hacking.

stillbourne 4y ago

But code is law therefore this is good for bitcoin.

cuteboy19 4y ago
No, if enough rich people are affected we can always roll back the blockchain, just ask etherium

Analemma_ 4y ago

The funniest part of all these stories is the part where they announce that they've "notified law enforcement". Yeah, this space is all, "woohoo, we're free from the Man! Code is law!", until an exploit is found and then they have to call on the State to enforce that "no, no, we need the people with guns to undo this transaction because it's not what we meant." It's like a living demonstration of why libertarianism fails.

676234e117 4y ago
This might be surprising, but not every crypto user is a pure libertarian, or believes that code is law. A significant amount of funds extracted from this exploit were from whitehat hackers who took the funds and plan to return them, to avoid them being taken by malicious actors.
cityzen 4y ago
There is an entertaining documentary series on HBO Max right now called The Anarchists which has the same types of scenarios. In fact in one scene a guy says, "we're anarchists, we can't call the cops!". It has some crossover with crypto as well.

ChicagoDave 4y ago

I’m still confused as to why web3 hasn’t come up with an “undo transaction” when shit like this happens.

yieldcrv 4y ago
the areas being bridged to often do have an undo transaction and is a real threat to a heist, which is why people try to get funds across the bridge as fast as possible, or only exploit the other side of the bridge
Ekaros 4y ago
The failure of these undo steps is that what if transactions downstream have already happened. Possibly with physical goods or real money. Unroll those too? And on whose cost?

shadowgovt 4y ago

Fundamentally, smart contracts as a technology are pretty doomed if their function requires the assumption of perfect code with no stop-gap when that assumption inevitably breaks. We can't expect widespread public adoption of a system like that; even lay people are too familiar with how unreliable software is.

mw888 4y ago
I’m not holistically recommending the currencies they were designed alongside, but I fully believe that there is a right way to build smart contract languages, and that they look a lot more like Pact or Plutus than an EVM compilable dialect. Both are functional, which means easier to read, and Pact is non-Turing complete and strictly typed, making it even easier, so much so that formal verification tools can assess what a contract is capable of automatically - a much smaller search space than EVM bytecode. When code is not permanent and backing millions of dollars or more of value, the trade offs may favor more powerful or flexible languages, but the ability to read and understand code and what it can do it so wildly important for smart contracts that I don’t see a world where Pact isn’t moving the right direction contrary to the EVM.

gadders 4y ago

Who was it who described Eth etc as "self-funding bug bounties"?

efitz 4y ago

Reason #5734 why cryptocurrency is a non starter for real people. Challenge: explain to a normie that their life savings is gone forever because of a zero initialization vector.

gillesjacobs 4y ago
Challenge: explain to a normie that their life savings is gone forever because of mortgage backed derivatives.
- happytoexplain 4y ago
  Bad analogy. This explanation has actually been done pretty reasonably by a few people. Further than that - after such explanations, it's clear even to normal people who's to blame, whereas software and cryptography are much more esoteric in that department. Of course there is no justice in either case, but at least normal people can see who is most appropriate to behead in the case of the traditional financial catastrophes, in the purely theoretical revolution.
  - rmbyrro 4y ago
    What a flex you pulled off!
    - happytoexplain 4y ago
      Doesn't that mean "brag"? I don't think I'm doing that.
- davewritescode 4y ago
  What a dumb retort If you got burned by mortgage backed derivatives and lost your life savings, it's ultimately because you were (knowingly or not) speculating on the value of real estate assets and making an assumption about future values of said assets. In the case of Nomad, it's that you put yourself at risk by using their service you could've lost everything you put in.

676234e117 4y ago

It is important that users come to better understand the different risk profiles between: 1. Owning ETH with a non-custodial wallet. 2. Owning ETH on a CEX. 3. Depositing ETH into a smart contract to receive a wrapped asset. This includes rollups and L2s. The majority of major crypto hacks[1] are in the 3rd group, and almost all of these hacks are related to protocol updates and governance. Either: the developers update their code, and accidentally push a bug, or one address or a group of addresses are allow-listed some privileged actions in the contract and that can become a weak point. Proxying and governance isn't the only way to design contracts. Two examples counter to this that are more robust are WETH ($6B) [2] and ETH2 Deposit ($20B) [3] which cannot be attacked in this way. If users wanted a new feature from the WETH contract, they would have to manually migrate over to the new address. Eventually we might see this kind of design be applied to bridges and rollups. [1] https://rekt.news/leaderboard/ https://rekt.news/leaderboard/ [2] https://etherscan.io/address/0xc02aaa39b223fe8d0a0e5c4f27ead9083c756cc2 https://etherscan.io/address/0xc02aaa39b223fe8d0a0e5c4f27ead... [3] https://etherscan.io/address/0x00000000219ab540356cbb839cbe05303d7705fa https://etherscan.io/address/0x00000000219ab540356cbb839cbe0...

rchaud 4y ago

How does this much money get 'lost' without heads rolling? I understand that some of the deposits are from retail 'investors' who are poorly organized more interested in token appreciation or yield than the safety of their funds. But even getting to $150m would take forever if it came from individuals. Surely there are large investors that provided the bulk of the capital. Shouldn't they intervene in some way? Or do these whales have so much to waste that they throw money into each of these projects knowing that they'll never see a cent back from 50% of them?

Dma54rhs 4y ago
Someone else here claimed they don't yet have a public token and it's all vc/institutional money.

paulpauper 4y ago

There must be thousands of people scanning contracts and defi protocols for any updates or changes and then trying to exploit it. A single exploit is equal to 1000s of years of income even at a regular tech job. This is happening every few weeks now it seems.

Fargoan 4y ago

I lost ~$400 worth of Nomad USDC in this attack AMA

nradov 4y ago
- deleted 4y ago
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- Fargoan 4y ago

edm0nd 4y ago

Another ouch >Messages popping up in public Discord servers of random people grabbing $3K-$20K from the Nomad bridge - all one had to do was copy the first hacker's transaction and change the address, then hit send through Etherscan. In true crypto fashion - the first decentralized robbery. https://twitter.com/FatManTerra/status/1554258880380772352 https://twitter.com/FatManTerra/status/1554258880380772352

wnevets 4y ago
Since "code is law" doesn't that mean it wasn't a robbery? They were just following the law.
- adrr 4y ago
  It will be interesting to see if they can prosecute people. They are called smart contracts and talked about being the actual contract.
  - vkou 4y ago
    People have been prosecuted for this sort of stuff over the past few years. 'Code is law' is just a reddit meme at this point, that has no basis in reality. 'Smart contracts' are just regular contracts, but with more opportunities for theft.
    - lottin 4y ago
      I'm pretty sure smart contracts aren't contracts. They're pieces of computer code.
- arlcode 4y ago
  Contracts (smart or not) cannot override the law. I'm not a lawyer but I would be very surprised if courts in most countries would buy this argument. Spelling or grammatical mistakes usually don't invalidate contracts in the real world and robbing a poorly secured vault is still illegal. The thief was obviously trying to get other people's money without their consent.

mikeyouse 4y ago

All these Web3 companies have a seriously difficult problem to solve -- you want to hire the best and brightest engineers to really lock-down your systems, but how would you prevent a core dev from 'accidentally' enabling some obscure attack and then going home that night and exploiting it? Hackers here are going to clear tens of millions of dollars.. an A++ rockstar engineer maybe makes $1M/year in total comp? How would you ever prevent insider attacks? How can you or the police tell the difference between a coding mistake and an intentional exploit?

latchkey 4y ago
multisig. no different than any other large company. Even our finance department uses multiple real signatures to sign off on large invoices.
- mikeyouse 4y ago
  As does ours - but they manually review things to give them a 'sense check'. That doesn't scale at all to the crypto world where the concept is permissionless and instant transfers. Said differently, how would you implement multisig in a setup like Nomad and prevent this type of attack?
  - latchkey 4y ago
    I've been harping on this part of DeFi for a long time... developers should be writing very good tests. Along with that, security reviews should be followed. This is the review in question [1] where developers ignored the possibility of an issue. This is the commit [2] that likely caused the issue, no tests added. Along with a large chunk of "never brag about your security" hubris [3]. [1] https://news.ycombinator.com/item?id=32319344 https://news.ycombinator.com/item?id=32319344 [2] https://github.com/nomad-xyz/monorepo/commit/46d14571f3eada6ecf9ffce8fdc3adea11e73031#diff-45141e17961c00f6e486db12a2155e88d1c5e6dbc66410c62e37f9eb1e312e32L193-R187 https://github.com/nomad-xyz/monorepo/commit/46d14571f3eada6... [3] https://twitter.com/0xemon/status/1554310755071119361 https://twitter.com/0xemon/status/1554310755071119361

Ekaros 4y ago

So how come there was 150 million in this? Haven't the people "investing" done their due diligence and reviewed the code? Shouldn't that be the expected behaviour like we all do with transitive dependencies?

rmbyrro 4y ago
They've exercised the same diligence as usual [1] [1] https://en.wikipedia.org/wiki/Madoff_investment_scandal https://en.wikipedia.org/wiki/Madoff_investment_scandal
yieldcrv 4y ago
The contract was fine until an upgrade Often times the market doesn’t like upgradeable contracts for this reason, ironically the misunderstood idea of smart contracts not being upgradeable is paraded as a bug but its all situational

washbrain 4y ago

Anyone who unironically believes "code is law" or "code is the contact" should be taking a hard look at this and realizing how terrible those ideas are.

shadycuz 4y ago
Really? Even with all the data showing how biased Human judges are? At my day job, I automate everything because humans can't reliably perform basic tasks. I'm not a believer in web3 or crypto but believe computers to be more impartial and would rather see them eventually take over certain aspects of legal work.
- washbrain 4y ago
  Judges are there to provide judgement. It's literally in the name. Judges are deliberately put in positions to make nuanced decisions. Yes, bias exists, but the solution isn't dogmatic and inflexible application of law.

malkia 4y ago

Apart from blockchain, nft, crypto, web3 - is Solidity, the language, worth exploring - can it be used (for fun) outside it's main purpose? Just curious...

danielvf 4y ago
As someone who writes Solidity full time - it's probably not useful for anything outside its current use case. The EVM, that it compiles to is a lot of fun though, if you like small understandable virtual machines. I like it a lot.
- malkia 4y ago
  Thanks - I took a brief look, but as soon as I saw certain crypto/eth specific things into decided not to go further (at least for now). Personally I'm very skeptical of everything crypto, but with time it may get to some better goals. It's not the technology really that detracts me, but it's use.
doopy1 4y ago
It can be used for fun if you find EVM development fun.

rhacker 4y ago

What's Web3?

superjan 4y ago
Or Moonbeam? Replica? WBTC? acceptableRoot()? I don’t get any of this. If I get it correctly, Web3 would use crypto technology to let you buy a digital costume that get to wear both while playing fortnite and on Facebook when chilling online with your real friends, that is unless fb switches to building a tiktok clone because it is easier money than the “metaverse”.
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civilized 4y ago

I know next to nothing about crypto, but I do know this is not the first time I've heard of a huge crypto hack involving security flaws in something called a "bridge". People should look into those!

throitallaway 4y ago

Off topic, but I refuse to read stuff like this in tweet format. It's nice that threadreader exists, but this short format shit has to go.

what-imright 4y ago

Are you kidding me? They lost 150 million dollars and the only penalty is to write up the bug on twitter? These children are playing with peoples lives. There’s a body count to losing that much money

yieldcrv 4y ago
People are often in a prisoner’s dilemma, where they are relying on the developers/team to spearhead the investigation including the judicial investigation against the perpetrators with the chance of their being a financial remedy and so therefore nobody is trying to kill or impair the developers/team if you were referring to people committing suicide or being suicided by the people they borrowed money from, thats not everyone’s problem and people in those circumstances should re-evaluate to avoid that risk or accept that risk
andrewia 4y ago
This is a really severe heist, but the latter part of your comment seems rather dramatic. Crypto is still generally not a medium of exchange, and most users are still speculative investors. Most of these investors have a hedge (or are using crypto as their hedge), except for the foolish.
- sosodev 4y ago
  Most perhaps, but stories of people committing suicide after every crypto crash are far too common...
- fanf2 4y ago
  But when someone wisely observes that crypto is useless for anything except scams, some cryptoenthusiast answers, but no, it is useful as a medium of exchange for people in third world countries with difficult foreign exchange restrictions.
- perlgeek 4y ago
  There a monetary value you can attach to a human's life, as much as that seems to be taboo. Depending on how you measure, that value is (in the US and Europe) typically in the order of 1..5 Mio USD. So it's not outrageous to assume that losing 150m comes with a body count, even if the funds wouldn't have bee used to directly save or improve lives otherwise.

woah 4y ago

The reason this happened is that Nomad's contract was "upgradable". This is a pattern where the source code of a contract is able to be replaced by a privileged developer account. This was not how Ethereum was intended to work and it actually needs some pretty convoluted stuff to make it work (see the UpgradeBeacon related code here: https://etherscan.io/address/0x88a69b4e698a4b090df6cf5bd7b2d47325ad30a3#code https://etherscan.io/address/0x88a69b4e698a4b090df6cf5bd7b2d...) The reason developers make their contracts "upgradable" is simple greed- they want to be able to launch more quickly than other projects without needing to ensure their code will stand the test of time. This may be OK for a social networking app MVP, but it's not OK for a smart contract which a user ideally should be able to audit and understand (or at least rely on the audit of someone else). "Upgradable" smart contracts can always be changed after the fact, as happened here, which means that any audit is meaningless. Top tier projects still do use simple un-upgradable smart contracts. Uniswap first wrote v1, then improved it and launched v2, then v3. The Uniswap v1 and v2 contracts are still running and usable, and will be for as long as Ethereum is around. Their security properties will always be the same as they were the day they launched. "Upgradable" contracts mean that you are trusting your money to some anonymous fat fingered (or at worst, criminal) dev, and it could disappear at any minute. They defeat the entire purpose of even using a blockchain.

artdigital 4y ago
Yes - but not having them upgradeable means that if your contract is dealing with a lot of money and a small bug was discovered, you are unable to patch it after the fact, even if people are actively abusing that bug It’s not really about greed. Deploying a program and having it unchangeable forever comes with risks, and more often when dealing with very complex applications, those aren’t worth it
- cypress66 4y ago
  People should NEVER touch any upgradable contract. It is literally centralized, and defeats the whole purpose of DeFi. Yes, writing perfect code is very hard. But smart contracts are an example of code that must be extremely thoroughly tested, formally verified and so on. But that doesn't go well with being first to market, move fast break things, etc.

drcongo 4y ago

I don't understand why people writing smart contracts don't also write tests.

skeeter2020 4y ago

I'm not smart enough to follow all the jargon and references in this tweet stream, but then I also didn't loose $150M so we'll call it a wash.

ChrisMarshallNY 4y ago

I liked the visualization...

saurabh20n 4y ago

For the curious, here are direct links: * Initialization was done 42 days ago: https://etherscan.io/tx/0x53fd92771d2084a9bf39a6477015ef53b7f116c79d98a21be723d06d79024cad https://etherscan.io/tx/0x53fd92771d2084a9bf39a6477015ef53b7... -- "Click to see More" and notice "Input Data" parameter [2] which sets _committedRoot to 0x00. * Click through the To contract to get to the code (click on Contract tab): https://etherscan.io/address/0xb92336759618f55bd0f8313bd843604592e27bd8#code https://etherscan.io/address/0xb92336759618f55bd0f8313bd8436... Just adding direct links to what samczsun and 0xfoobar are talking about in https://twitter.com/samczsun/status/1554260106107179010 https://twitter.com/samczsun/status/1554260106107179010 and https://twitter.com/0xfoobar/status/1554269071214088193/photo/2 https://twitter.com/0xfoobar/status/1554269071214088193/phot...

indigodaddy 4y ago

I know literally 0 about crypto so please communicate as if I were a 5th grader (actually they may perhaps be more knowledgeable than I). Any chance for the exploiters to be prosecuted, or is it essentially all anonymous?

che_shirecat 4y ago
alot of the exploit wallets are doxxed, e.g. they have an initial deposit into wallet from a centralized crypto exchange like coinbase or FTX that investigators can request info from. its actually pretty hard to get a "clean" wallet, and even if you have one, mixing the crypto back out to fiat is tricky as well. what's worse, all transactions are permanently on the blockchain so if they don't catch you now they can always catch you later.
MBCook 4y ago
Trying to speculate my immediate question is: what court gets jurisdiction over this and why? * The one where the investor lives? * The alleged thief? * The creators of the contract? * Some 4th option?

tmpz22 4y ago

Everytime I see a story like this I wonder if the exploit was left intentionally for the founders and developers to exploit one way or another. Even if they themselves do not take the money it would be trivial to sell the exploit for some form of delayed (and more easy to launder) payment.

yuan43 4y ago

> tl;dr a routine upgrade marked the zero hash as a valid root, which had the effect of allowing messages to be spoofed on Nomad. Attackers abused this to copy/paste transactions and quickly drained the bridge in a frenzied free-for-all From this explainer: > It’s [Nomad is] built to address security first The Nomad team has been building secure bridges as a team for 4+ years and has studied the pitfalls of multi-sig and validator-based bridges. https://medium.com/imperator-guide/nomad-a-cross-chain-interoperability-protocol-for-generalized-message-passing-2f7a916df3f0 https://medium.com/imperator-guide/nomad-a-cross-chain-inter... Assuming this is true, and assuming the team is not incompetent or composed of the typical grifters, perhaps it's time to draw the inevitable conclusion. No amount of experience is sufficient to safeguard an Ethereum protocol of any interesting complexity. It's a reasonable question to ask, WTF is Nomad for? After all, isn't Ethereum supposed to be the World Computer, Turing complete and ready for any task? Nope. Never was. I think a good chunk of the answer can be found on the home page: > Nomad reduces gas fees by a factor of 10x relative to traditional header relay systems, while remaining decentralized. https://www.nomad.xyz https://www.nomad.xyz That world computer is choked to the gills with accumulated waste. The proliferation of chains is the response. Each one is less secure than its forebear. Gobbledygook like Nomad is the "connective tissue" to get the various organs of this science project talking to each other. Dive deeply enough down and you find the root of it all: everybody wants to make the next Bitcoin, Ethereum, Cardano, Polkadot, and so on. With each turn of the crank a new crop of Barnums springs up to take the money of an unending supply of digital rubes.

woojoo666 4y ago

Im starting to get the feeling that security by obscurity is a good thing. There's a reason why banks don't open source their infra, or why Google/Facebook/Twitter don't open source their algorithms. No matter how smart your engineers are, they are going to make mistakes, and if the incentive is high enough then people will find and exploit those mistakes. It's honestly amazing that L1 blockchains (like bitcoin, ethereum, monero) have lasted this long at all

cypress66 4y ago
The difference isn't open vs closed source. The difference is that banks can reverse stuff.

zxspectrum1982 4y ago

How can Nomad afford to lose $150M and go on like nothing happened? Same for other exchanges which have lost hundreds of millions. It seems really weird. Any real-world company which would lose $150M would have a lot of pressure on it, investigations, dismissals, etc.

philippz 4y ago

Pity to see. Nomad's team is a really strong one, and their cross-chain bridge design is one of the best out there.