On Monday, the crypto community began noticing blockchain data showing that funds were converted into staked Ether and then wrapped into staked Ether – tokens supported on decentralized finance platform Lido.
The data indicates that the hacker used the wrapped staked Ether as collateral to take out a $13 million loan in the DAI stablecoin, which was in turn used to purchase more staked Ether. The exploiter then repeated the trades.
Staking involves earning rewards by staking Ether coins to help secure the Ethereum network. Crypto protocols like Lido offer liquid avatars of these locked tokens for easier and more flexible access to staking rewards.
Lido is the first decentralized project by total crypto value sent to the platform. DeFi Llama estimates the total value of crypto locked on Lido to be $8.25 billion.
Wormhole is a communication bridge between Solana and other DeFi blockchain networks. Hackers stole about $320 million from him last year, one of the biggest such thefts. The crypto division of trading giant Jump, a driving force behind Wormhole, has repaid the losses.