hold or not - Solana-based Cypher Protocol Halts Smart Contract after $1 Million Exploit

Cypher Protocol, a decentralized futures exchange operating on the Solana blockchain, was forced to suspend its smart contract following a significant exploit that resulted in an estimated $1 million in losses.

The incident was reported to Cypher’s 13,500 followers on social media platform X (formerly known as Twitter) on August 7, where the team disclosed the security breach and took swift action to freeze the affected smart contract.

In response to the exploit, Cypher Protocol promptly initiated an investigation to identify the root cause and determine the extent of the damage.

Additionally, they reached out to the hacker involved in the attack, aiming to engage in negotiations for the potential return of the stolen funds.

According to data obtained from the Solana blockchain explorer Solscan, the wallet suspected to be associated with the exploit made off with approximately 38,530 Solana tokens (SOL) worth about $23 each, as well as $123,184 worth of USD Coin (USDC) at the exchange rate of $1.00.

In total, the attacker managed to accumulate $1,035,203 from the illicitly obtained funds.

Shortly after the breach, the alleged hacker transferred 30,000 USDC to Binance’s Solana USDC address “kiing.sol” in an apparent attempt to convert and cash out the stolen assets.

Notably, various individuals in the crypto community took action by sending non-fungible tokens (NFTs) to the attacker’s wallet, urging them to return the funds.

Some of the NFT messages requested the return of the stolen assets with a stern warning, while others expressed frustration and demanded immediate restitution.

READ MORE: Alchemix, Curve Finance, and JPEG’d Reclaim $61 Million Stolen in Hacker Attack Through Bug Bounty Initiative

Despite the exploit, the alleged hacker has not yet transferred any of the stolen Solana-based funds to the Ethereum network as of the time of reporting.

The incident occurred during Cypher Protocol’s mtnDAO hacker house event, which it co-hosted with another Solana protocol called Marginfi.

However, Marginfi asserted its independence from Cypher and clarified that it remained unaffected by the attack.

At this stage, Cointelegraph has sought further information from Cypher Protocol to gain more insights into the incident.

However, an immediate response from the team was not received at the time of reaching out.

The exploit serves as a reminder of the ongoing security risks in the decentralized finance (DeFi) space, emphasizing the need for continuous vigilance and robust security measures to safeguard users’ funds and prevent similar incidents in the future.