Crypto startup Nomad drained of almost $200M in bridge hack

Nomad, a bridge protocol used for moving cryptocurrencies across different blockchains, has lost nearly $200M from hackers in a security exploit. The attack on Monday comes on the heels of a slew of similar high-profile events resulting in increased concerns about the evolving decentralized finance space. "We are working around the clock to address the situation and have notified law enforcement and retained leading firms for blockchain intelligence and forensics," the startup wrote in a Twitter post Tuesday. In the cryptoverse, a bridge ultimately connects two blockchains allowing users to send crypto from one chain to another, instead of transacting on a single blockchain, which can prove to be costly if there's a high level of activity. In Nomad's case, its bridge service locks up tokens in a smart contract on one chain followed by a reissuance of those tokens in "wrap" form on the other chain (think of wrapped bitcoin (WBTC-USD)). The wrapped coins are backed by reserves, which are generally a common target for hackers especially if the bridges are subject to vulnerabilities. So, what happened? "Nomad's protocol had a software bug that allowed users to withdraw more assets than were deposited in the bridge," Bloomberg reported, citing Elliptic Co-founder Tom Robinson. “After the initial hack, upwards of 40 other exploiters - comprising MEV bots, flashbots, and independent exploiters - replicated the attack in a manner that...