The layer-2-based scaling solution of Optimism has experienced a setback as the smart contract of the platform’s market maker has been exploited due to which a loss of up to 20m OP tokens was witnessed in this respect.
This incident took place on 26th May however was not informed about to the venue’s community until recently. 1 million tokens with a value of nearly $1.3M were traded on 5th June. Today, an extra 1M tokens with the value of approximately $730,000 were transacted to the Ethereum address of Vitalik Buterin on Optimism. The residual tokens are inactive at this time nonetheless could be traded or utilized at any time to influence governance decisions.
OP token counts to be the local token operating on Optimism Layer-2 and a portion of its supply got airdropped to the consumers of the network on 1st June. Considerable assistance is provided by the L2 solutions in eliminating congestion on a blockchain that is based on layer-1 like Ethereum.
The summary of the incidents provided by the Optimism group on Thursday elaborated on how the crypto market-making company Wintermute expressed the intention to utilize the 20M OP tokens. Following the delivery of 2 experimental transfers, the group of Optimism sent the complete token amount. Nevertheless, Wintermute found out that it was unable to reach the tokens due to the smart contract used by it to receive the tokens as it was based on L1 and no update was incorporated into it for its deployment on Optimism.
With the very technical oversight, a malicious entity started an attack and took the charge of the smart contract on layer-2. When the very issue came into the sight of Wintermute, they initiated a recovery activity with the target of deploying the L1-based multisig contract however it was too late to tackle the matter. For a multisig contract, there is a need for consent from the chief holders to carry out a transfer.
On 9th June, a message was sent to the community of Optimism in which Wintermute declared itself to be completely responsible for the incident. The company mentioned that OP buybacks would be performed by it that would be equal in their value to the exploited ones, making their best endeavors to minimize the effects put on the price volatility. The majority of reactions made by the community on this decision highly praised the venue for transparency as well as for disclosing the matter to take the blame on themselves.
The post Layer-2 Scaling Solution Optimism Faces A Loss Of 20 Million Tokens In An Exploit appeared first on CryptocyNews.com.
from CryptocyNews.com https://www.cryptocynews.com/layer-2-scaling-solution-optimism-faces-loss-20-million-tokens-exploit/
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