Last Updated on September 25, 2022 by Bitfinsider

Optimism, one of Ethereum’s most popular layer-2 protocols, was hacked and lost nearly $17 million in Optimism governance tokens (OP). Wintermute, the market maker, published a wrong address for an Ethereum (L1) multisig that they had not yet deployed to Optimism, which led to the breach (L2).

In order to improve the user experience, the Optimism Foundation teamed with Wintermute to make liquidity provisioning services easier on its platform. Wintermute was then given a 20 million OP loan by the Optimism Foundation.

Wintermute admitted in a community announcement that they made a “major blunder” by providing an L1 address for the transfer that was not updated to work on Optimism. Due to Wintermute’s lack of technical control, the money were left open to an exploit, and the attacker was able to steal them on the L2.

On May 30, Wintermute informed the Optimism team of the oversight and provided $50 million USDC as collateral, as the launch the next day was a top priority. With the support of the Gnosis Safe team, the market maker began looking for ways to recover the cash. “We made the assessment that the money were possibly retrievable and that nobody other than Wintermute could collect those funds,” Wintermute explained.

The hacker has thus far sold 1 million OP tokens for ETH and withdrawn to L1 using Synapse and Hop bridges, before using tornado cash on mainnet. Meanwhile, OP’s market value has plummeted, with its price hovering below $1. Over the last 24 hours, OP has dropped roughly 18%.

Recently, a pricing error leads to an exploit in mirror protocol, and Quickswap gotten an exploit from Godaddy, and Maiar exchange got exploited and shuts down their operation.

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