Optimism, a layer-2 scaling solution built on the Ethereum network, on Wednesday shared details about an exploit that resulted in the loss of 20 million OP tokens worth an estimated $16 million.
The Optimism Foundation, an organization that is aimed at bolstering the Optimism ecosystem, two weeks ago sent a loan of 20 million OP tokens from its Partner Fund to crypto market maker Wintermute, for liquidity provision in preparation for its OP token airdrop.
Optimism admitted that it sent two initial test transactions and they were confirmed by Wintermute. The remaining tokens were then sent to the market maker company.
Wintermute, on their part, provided the wrong address “due to an internal mistake,” causing the entire fund to be inaccessible. The company devised a way to access the funds, while still notifying the Optimism team about the issue.
As the airdrop was about 24 hours away, the Optimism team sent an additional short-term 20 million tokens to Wintermute, after the market maker firm had provided collateral of $50 million USDC. This enabled the airdrop to be held on its intended date, May 31st, 2022.
Before Wintermute could execute their intended retrieval plan for the inaccessible fund, an unknown actor got to the funds first and withdrew them into an Optimism wallet under their custody. One million OP tokens were withdrawn by the actor via Tornado Cash.
At this time, 18 million OP tokens remain in the wallet belonging to the actor. The malicious actor sent an additional 1 million OP tokens to Vitalik Buterin’s address on the Optimism network.
Wintermute Bears the Blame
Evgeny Gaevoy, the founder and CEO of Wintermute, said that he hopes this occurrence is “a white hat exploit.” He also apologized and gave a plan that is aimed at keeping the Optimism protocol steady.
“The initial error is 100% Wintermute’s fault and as such we will proceed to buy OP every time the attacker sells it to make the protocol whole eventually (we did initiate buying the first million OP tokens yesterday already),” he said.
Gaevoy further noted that his company is monitoring the wallet holding the stolen funds, to retrieve the funds.
Optimism, on the other hand, noted that a network upgrade could be carried out by the protocol developers, resulting in a hard fork that will “halt the movement of those OP tokens.” However, the company said it will not resort to taking that action.
$OP Price Reacts
Following the announcement made by Optimism, the token has seen about a 20% decrease in price. At the time of writing, the OP token was trading at $0.83.
Meanwhile, users expressed their disapproval of the development, noting that Optimism should have shared the information earlier, and not two weeks after the occurrence. A user tagged Optimism as a “dangerously centralized” protocol.
Source: https://coinfomania.com/optimism-network-20m-op-airdrop-mistake/#utm_source=rss&%23038;utm_medium=rss&%23038;utm_campaign=optimism-network-20m-op-airdrop-mistake