The crypto community on Monday began noticing blockchain data showing that the funds were converted into staked Ether and then wrapped staked Ether — tokens that are supported on the Lido decentralized finance platform.
The data signals that the hacker used the wrapped staked Ether as collateral to take a $13 million loan in the DAI stablecoin, which was in turn used to buy more staked Ether. The exploiter subsequently repeated the trades.
Staking involves earning rewards by locking up Ether coins to help secure the Ethereum network. Crypto protocols like Lido offer liquid avatars of these locked up tokens for easier and more flexible access to staking rewards.
Lido is the top decentralized project by total value of crypto sent to the platform. DeFi Llama estimates that the total value of crypto locked on Lido stands at $8.25 billion.
Wormhole is a communication bridge between Solana and other DeFi blockchain networks. Hackers stole about $320 million from it last year, one of biggest such thefts. Trading giant Jump’s crypto division, a leading force behind Wormhole, refunded the losses.