Wormhole, a bridge linking the Ethereum and Solana blockchains, lost over $320 million on Wednesday afternoon to an apparent hack.
Bridges are necessary in the cryptocurrency ecosystem because holders of crypto tend to operate within multiple blockchain ecosystems. Wormhole enables users to move their tokens and NFTs between Solana and Ethereum, two of the fastest-growing rivals to Bitcoin. Wormhole functions by having two smart contracts, one on each chain.
“The $320 million hack on Wormhole Bridge highlights the growing trend of attacks against blockchains protocols,” said CertiK co-founder Ronghui Gu. “This attack is sounding the alarms of growing concern around security on the blockchain.”
The DeFi space has navigated hacks in the past, with a $600 million Poly Network crypto heist happening last year. Some experts think that this latest hack could push Solana’s price all the way down to $50. Prior to the hack, the currency was over $100.
Many investors are curious about the increasingly mainstream cryptocurrency space, looking to get in on this exciting, fast-growing asset class. But hacks and vulnerabilities combined with inherently volatile assets can make some investors squeamish. It is one thing to ride out the dramatic swings in price, another entirely to have your investment wiped out by a fork or a hack.
One way to sidestep these issues entirely is to invest in crypto equities such as the Vaneck Vectors Digital Transformation ETF (DAPP). DAPP provides exposure to the digital infrastructure around cryptocurrency. This includes miners, exchanges, and other firms on the forefront of digital transformation.
A mining company will continue to generate profit even if a big hack takes place. These infrastructure firms will still be somewhat tethered to the overall fortune of cryptocurrency, but through them you don’t have to worry about your funds being heisted out of existence.
For more news, information, and strategy, visit the Crypto Channel.
