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Over the past twenty years, the Web has evolved and its use has grown exponentially. As the number of users increases, so do the threats. The Internet has improved, as cyber attacks did: from malware to trojans to the timeless phishing scam, the methods are more or less still the same. If once it was a single individual who had to orchestrate and commit the crime, nowadays we talk about cyber-gangs, specialized and organized in various types of cyber hacks. One of the most affected technologies in recent years is the blockchain, indeed. According to an Elliptic report, Defi and the whole crypto market suffered losses of over $12 billion in 2020 and 2021, of which more than $10 billion were stolen over the past year. However, some of the thefts occur more due to negligence and oversight of the developers than to criminals’ acumen. Unfortunately, 2022 has also started under the sign of hacks and scams.
Layer 2 scaling solutions
One of the biggest issues faced by blockchains nowadays is about transaction speed. Following the rise of DeFi, the increasing adoption of such decentralized applications has led to network congestions. Options such as Bitcoin and Ethereum have battled - and still do - slowdowns in their networks, delivering users a negative experience. Therefore, there is a rising need to reduce the amount of transactions on existing networks, thus improving their scalability. Creating layer 2 is currently the most popular solution.
A layer 2 (L2) is a blockchain built on top of an existing network. The main difference is security-wise: L2s entrust network security to layer 1s (L1), the base blockchain. Therefore, the goal of L2s is to improve L1s scalability. By sending chunks of transactions to the next layer, the base blockchain shows a decrease of transactions to process.
Optimism
One of the new scaling solutions for Ethereum is called Optimism. Optimism is an L2 which processes Ethereum transactions on its chain. Thanks to the optimistic rolloups technology, Optimism is able to process large amount of transactions in a short time; once processed, it sends data to the Ethereum mainnet in small chunks. This solution is indeed much faster and cheaper than the network created by Vitalik Buterin. Optimism, together with Arbitrum (another Ethereum L2), are today the most popular layer 2 networks.
A bizarre hack
On June 8, 2022, the Optimism Foundation announced, via Twitter, that 20 million OP (the Optimism governance token) have been stolen.
Unfortunately, besides the large sum, the news sounded ordinary, especially nowadays where cyber attacks happen so frequently. However, the theft occurred due to human error. The Optimism Foundation sent 20 million OP to Wintermute, a partner company, to the wrong network. The wallet address provided by Wintermute was indeed associated with the Ethereum network but had not yet been synced with the new layer 2. When Wintermute realized what had happened, it was too late: a malicious user worked against the clock, hijacking the transaction to his wallet address. The hacker then sent the funds to multiple wallets via Tornado Cash protocol, protecting recipient addresses. At the time of the theft, the tokens were worth approximately $ 35 million.
Unforeseen plot twist
The following week, the Optimism Foundation announces that the hacker has returned the stolen funds. In addition, the user was awarded 2 million OP as a "bounty".
It should not be emphasized that this situation has produced much more uncertainties surrounding the blockchain technology and its vulnerabilities; it has also undermined Optimism credibility. The current cross-chain status and its functionalities are a hot topic, especially if the goal is to increase the awareness and adoption of DeFi. The fairness of the cyber attack committed by a user does not justify such a mistake and, despite the happy ending, the error has been fatal.
Cybersecurity threats
Cybersecurity sector has been constantly growing lately. Everyday cyber attacks are on the agenda. The latest researches present worrying statistics indeed:
- 94% of malwares is delivered via email.
- 85% of cybersecurity breaches are caused by human errors.
- A ransomware attack occurs every 10 seconds.
- Cybercrime's annual global losses are expected to reach $10.5 trilion by 2025.
Also, blockchain’s use cases are endless, and understanding the way to make this technology even more efficient is just the beginning.
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Cybersecurity vs Blockchain is an in-depth series about the most trending hacks in recent history. Below a comprehensive list of the ones we have been talking about:
Sources:
https://www.coindesk.com/tech/2022/06/09/15m-of-optimism-tokens-stolen-by-an-attacker-after-wintermute-sent-wrong-wallet-address/
https://decrypt.co/102541/optimism-hacker-returns-17-million-tokens-airdrop
https://cryptobriefing.com/elliptic-estimates-12b-lost-to-defi-exploits/