Solana, which has suffered network outages in the past, is a rival to the Ethereum blockchain. As transaction prices on Ethereum rose last year, chains like Solana, which tout their low transaction fees, emerged as alternatives for minting non-fungible tokens.
Following the attack on the bridge protocol Nomad at the beginning of the week, hackers hacked the Solana ecosystem early on Wednesday, affecting hundreds of wallets.
Damage assessments range widely. Elliptic, a blockchain forensics company, reports that over 7,900 Solana wallets have had just over $5.2 million in cryptocurrency stolen from them so far. According to security firm PeckShield, eight million dollars from victims’ wallets were stolen by four Solana addresses.
Tom Robinson, the other co-founder of Elliptic, stated that “the core cause is still unclear.” “Rather than a fault in the Solana blockchain itself, it appears to be caused by a flaw in some wallet software.”
The attack sent Solana’s SOL token down as much as 7.3% to $38.40 in early trading on Wednesday, its lowest in a week. Bitcoin was up 1.5% at $23,367.
Crypto projects are proving a rich vein for hackers and the industry has suffered numerous attacks this year. Solana’s woes come days after Nomad — a bridge protocol for transferring crypto tokens across different blockchains — lost close to $200 million in security exploits on Monday. More than $1 billion has already been stolen from bridges in 2022, according to a June report by Elliptic.
“Much remains unknown at this point — except that hardware wallets are not impacted,” Solana spokesman Austin Federa said.
While there’s speculation the incident was a supply-chain attack, the nature of the exploit remains unclear, Federa said. Supply-chain hacks occur when an outside party or provider with access to the victim’s systems and data is infiltrated.
Solana, which has suffered network outages in the past, is a rival to the Ethereum blockchain. As transaction prices on Ethereum rose last year, chains like Solana, which tout their low transaction fees, emerged as alternatives for minting non-fungible tokens. The code underpinning Solana is also popular with clients looking to build their own decentralized-finance applications.
Some NFTs were also stolen in the hack — but the full impact of the exploit is still unclear, Elliptic’s Robinson said.