Home CryptoCurrency News Why This Hacker Sent 1M Optimism Tokens To Vitalik Buterin
CryptoCurrency News - June 10, 2022

Why This Hacker Sent 1M Optimism Tokens To Vitalik Buterin

The inventor of Ethereum Vitalik Buterin was the unintended recipient of 1 million OP tokens from this network’s scalability solution Optimism. The team behind this project addressed concerns about a potential exploit related to the launch of their governance token.

Related Reading | TA: Bitcoin Stuck In Key Range, Why A Major Breakout Is Possible

As clarified by Optimism, they entered a deal with liquidity provider Wintermute to “facilitate a smoother experience for users” looking to buy OP and participate in the project’s governance model. As part of the agreement, Optimism sent 20 million OP tokens to a multi-signature address.

5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!

However, the liquidity provider was unable to access the funds as it discovered the address was designed as an Ethereum layer-1 multi-sig without an Optimism, which operates as a second layer solution, smart contract deployment. About this, the liquidity provider said:

As we communicated the wallet address to the Optimism team, we made a serious error.

The Optimism partnered began a “recovery operation” to gain access to the funds, as they concluded with Wintermute that the funds “were potentially retrievable and that nobody other than Wintermute could recover those funds”, the liquidity provider said in a statement.

The recovery operation was scheduled, the liquidity provider clarified, for June 7th, 2022, but a hacker beat them to it. The team behind the Ethereum second layer solution explained:

BitStarz Player Lands $2,459,124 Record Win! Could you be next big winner?

Get 110 USDT Futures Bonus for FREE!

Unfortunately, an attacker was able to deploy the multisig to L2 with different initialization parameters before these efforts were completed, assuming ownership of the 20m OP.

Furthermore, Optimism claims the attacker began selling the stolen funds. As much as 1 million OP tokens have been “dumped” into the market from the hacker’s address: 0x4f3a120E72C76c22ae802D129F599BFDbc31cb81.

At the time of writing, this address still holds 18 million OP tokens or $14 million with an additional $3 in USD Coin (USDC). However, new developments made the whole incident weirder.

Why Sent Part Of The Funds To Vitalik Buterin?

Developer Yoav Weiss, Security Fellow at the Ethereum Foundation, provided other details about the recent events. He believes the attacker could be a Whitehat hacker.

He based this presumption on the fact that the attacker waited four days before taking ownership of the OP funds. During that time, there was a risk that Wintermute might have deployed the solution to recover the funds.

In addition, the attacker hasn’t moved the funds, as Optimism believed. In step, the inventor of Ethereum Vitalik Buterin received 1 million tokens and Weiss himself received another 1 million OP.

Projects often send Vitalik Buterin tokens to celebrate the launch of their platforms, or to “burn them”, as the inventor of Ethereum rarely uses them. The fact that Weiss is a security fellow seems to be part of a message from the attacker.

The team behind Optimism claims the hacker has not used the funds for any activity related to its governance model. If this situation changes, they claim additional measures will be taken alongside the OP community.

Other measures are available, but the Optimism team refuses to enforce them and jeopardizes the project’s vision of a permissionless network. They concluded:

(…) incidents like this are the growing pains of an evolving industry. This is a reminder to everyone dealing with contracts across different chains that the security assumptions of one chain do not necessarily carry over to another.

Related Reading | Chainlink Price Surges As The Team Releases New Staking Roadmap

At the time of writing, OP’s price trades at $0.8 with a 16% loss in the last 24-hours.

OP Vitalik Buterin Ethereum Optimism
OP’s price trends to the downside on the 1-hour chart. Source: OPUSDT Tradingview


Leave a Reply

Your email address will not be published. Required fields are marked *

Check Also

Not The 2018 Bear Market, Bitcoin Price Could Hit $20,000 In December

The Bitcoin price rebounded off the low of its current range and retraced its weekend loss…