Poly Network loses $611 million in biggest ever DeFi hack; crypto market keeps chugging along
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Another day in crypto, another DeFi hack. But this one’s a doozy – the biggest ever, in fact. Poly Network lost an estimated US $611 million today in a sickening exploit. Meanwhile, the overall crypto market is having a mixed but largely steady day.
Poly Network (not to be confused with Polygon) is a cross-chain decentralised finance (DeFi) protocol founded by NEO’s Da Hongfei and is part of China’s Blockchain Services Network (BSN). This’ll go down just wonderfully with the anti-crypto factions of the CCP, then.
The network was attacked in the early hours of the morning (AEST). The hacker, or hackers, reportedly drained more than US $611 million worth of digital assets from at least three wallet addresses.
This is still a developing story at the time of writing, with transactions involving the exploiter readily seen on Etherscan and transfer-blocking and asset-freezing attempts also taking place.
Estimates of the full amount pilfered are varied, but it looks like about US $273 worth of ETH has been stolen, as well as US $253 million in tokens on the Binance Smart Chain and about US $85 million worth on the Polygon chain.
The team behind Poly Network took to Twitter to encourage cryptocurrency exchanges to blacklist any tokens coming from the hacker or hackers’ addresses. They also pledged to “take legal actions” and urged the hackers to return the stolen funds.
Well, they may as well ask.
We are sorry to announce that #PolyNetwork was attacked on @BinanceChain @ethereum and @0xPolygon Assets had been transferred to hacker's following addresses:
— Poly Network (@PolyNetwork2) August 10, 2021
In at least some sort of silver lining, members of the crypto industry have swiftly responded in attempts to stop the movement of the stolen assets. For instance, the Tether (USDT) CTO, Paolo Ardonio, was able to blacklist the hacker’s addresses, essentially freezing stolen amounts of USDT.
— Paolo Ardoino (@paoloardoino) August 10, 2021
But… for every good deed in crypto, there unfortunately seems to be an equal and opposite reaction…
LMFAO, what is going on.
— Hsaka (@HsakaTrades) August 10, 2021
According to The Block, the cause of the hack was an uncommon cryptography issue. “It may have been similar to the Anyswap exploit, which saw $7.9 million stolen due to a hacker reversing the private key,” wrote Tim Copeland.
At least one prominent YouTuber has been affected by the attack. The Hong Kong-based influencer Michael Gu, better known in crypto as “Boxmining”, revealed on Twitter that he’s lost potentially a “significant amount” of his savings to the exploit, which were locked up on the protocol in ETH, BTC and USDC.
Boxmining has 250,000 subscribers on YouTube and is known for being well across the Chinese and South-East Asian crypto space.
In his Tweet stream he said that a lot of Chinese funds and citizens have been affected because Poly Network is used by the Chinese-developed blockchains NEO and Ontology to bridge assets from Ethereum.
“Basically, assets are locked on Ethereum via smart contracts. Somehow the hacker managed to withdraw it all,” he wrote.
1) So I'm a victim of the @PolyNetwork2 hack – it can potentially be a significant amount of my ETH/ BTC/ USDC savings. I'm probably still in the denial phase. It seems at this point there isn't much I can do other than to sit on my hands.
— Boxmining (@boxmining) August 10, 2021
Not even sure how to describe what I feel right now. Hacker 600+ Million and he's trolling hard. pic.twitter.com/LVZtlFoxdf
— Boxmining (@boxmining) August 10, 2021
We’ll continue to follow the story for any further developments.
It remains to be seen if the exploit will have much of an effect on the market more broadly. Hacks on individual projects don’t always tend to have much of a ripple effect on sentiment. But this was a big one.
At the time of writing at least, the crypto market seems to be going about its relatively upbeat business, with some prominent coins in healthy green territory and various YouTubers posting moonshot and hidden-gem videos that tend to appear when things flip bullish.
The overall market cap is close to where it was this time yesterday, at about US $1.92 trillion and up 0.74%.
Bitcoin (BTC), having reclaimed its 21-week EMA (exponential moving average) as support, for now, is changing hands for US $45,274, down slightly from yesterday. Analyst Rekt Capital wants to see it continue to hold $45,200 as a new level of support.
#BTC has managed to Daily Close above ~$45200
Now $BTC is in the process of turning this same level into new support
— Rekt Capital (@rektcapital) August 10, 2021
As for Ethereum (ETH), it’s also sitting pretty comfortably for now, at a similar spot to 24 hours ago: US $3,130. For a slice of ETH analysis, we’ll turn from a technical expert to an on-chain info specialist.
Highly respected data-watcher Willy Woo, who assembles much of his information from crypto analytics platform Glassnode, thinks Ethereum is far from being in overbought territory, meaning he’s expecting room for it to run higher.
There’s a “supply shock” happening, too, according to the Kiwi analyst, which hasn’t even yet accounted for the latest supply burn from EIP-1559. “Glassnode will be rolling in EIP-1559 data soon,” he commented in a Twitter stream today.
Ethereum supply shock well and truly at all time highs.
Looks like the market overpriced it in May but is probably underpricing it July / August. pic.twitter.com/PIUKN6DLv9
— Willy Woo (@woonomic) August 10, 2021
Still in the top five by market cap, Cardano (ADA) is having a particularly good day, up roughly 5% in the past 24 hours at press time, hitting a peak today of US $1.59 and currently trading at US $1.55 – the highest levels it’s been at since mid June.
As reported by Stockhead yesterday, Cardano looks to be building momentum as it moves into the purple phase of its Alonzo testnet, with mainnet smart-contract deployments just around the corner at the end of August or beginning of September.
Good bounce of #Cardano, but didn't break the downtrend yet.
Looks good. pic.twitter.com/HB1S7Qfsa5
— Michaël van de Poppe (@CryptoMichNL) August 10, 2021