Token Bridge Nomad Loses About $200M Following Latest Exploit

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The Nomad cross-chain bridge encountered an attack on Monday, and the scammers practically stole all cash from the protocol. The hack saw a loss of crypto worth approximately $200 million. Let us find out what happened.

Similar to other cross-chain token bridges, Nomad allows users to transfer digital coins between different blockchains. The Monday attack is recent of the multiple reported cases that have raised worries about the security of cross-chain bridges.

According to DeFi Llama, a decentralized finance tracking platform, the bridge lost nearly all its $200M in crypto, leaving its wallet with only $651.54. meanwhile, Nomad later revealed ‘while hat pals’ took some of the cash to protect the platform.

What Happened?

Bridges generally operate by re-issuing coins in ‘wrapped’ form on another chain after locking the tokens in a ‘smart’ contract on one platform.

Meanwhile, compromising the ‘smart’ contract means the wrapped coins lose their backing. That’s the case with Nomad, making everything worthless.

@samczsum, an analyst at the crypto investment firm Paradigm, tweeted that the latest change to one of the smart contracts on Nomad simplified counterfeit transactions.

That allowed users to withdraw cash that didn’t belong to them. Unlike other bridge attacks where one scammer conducts the whole deal, Nomad stayed free for all.

The event saw the bridge losing WBTC, WETH, USDC, FRAX, CQT, HBOT, IAD, DAI, GERO, CARDS, C3, and SDL.

Beware of Imposters!

Nomad alerted its users after discovering the incident. Moreover, it warned investors to watch out for impersonators. Nomad cautioned users about individuals acting as Nomad with scam addresses to collect cash.

The MoonBeam platform remains on hold amid investigations. That means users cannot complete smart contracts & ‘normal’ transactions with MoonBeam. Meanwhile, one individual has publicly confirmed his intent to act as a white hat scammer.

More Bridge Hacks

Recent months have seen increased bridge attacks as crypto users showed amplified desire to transact between blockchains.

Though cross-chain bridges allowed fledging blockchains spread, failure might be damaging for minor chains that rely on them for a substantial amount of their total liquidity. Evmos, a blockchain on Nomad, reacted to the attack, claiming it seriously damaged Evmos’ TVL.

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