What happens to bridging tokens when an encryption bridge is attacked by hackers?
2026-10-04 04:12:06
CoinMeta data: When a crypto bridge is hacked, the bridging tokens may become under-margined, triggering a decoupling and spreading losses to decentralized finance (DEFI). In many bridge designs, the underlying assets are locked on the source chain, while the corresponding wrapped tokens are minted on the target chain. These new tokens can only maintain a 1:1 value if the supporting assets remain secure. If attackers withdraw a large amount of ETH from the bridge contract, the wrapped tokens will become under-margined, and market participants may sell these tokens at a price lower than that of the native ETH. Attackers could also exploit the minting mechanism to forge unsecured wrapped tokens, which they can then sell on decentralized exchanges, causing even greater losses. Such attacks could lead to lending protocols facing worthless collateral and potentially trigger DEFI bankruptcies. Bridge operators may replace the stolen collateral or suspend minting to restore support.
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Source:Coinpaper
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