A white-hat hacker has breached the security architecture of the Ethereum L-2 Optimism by discovering a critical bug in a smart contract of the blockchain network. The hacker fixed the bug and was paid $2 million as a bounty.
The system bug in one of Ethereum’s smart contracts was first discovered on the 2nd February by the hacker, who subsequently alerted Optimism about his findings leading to the immediate fix of the reported bug in time.
However, before the critical bug was discovered, an unknown hacker had already created ETH on the Optimism system by altering the crucial part of the defense mechanism harvesting the opcode for a contract holding some ETH tokens. The opcodes, as designed, are special instructions that function on the Ethereum blockchain environment.
Etherscan Employee Mistakenly Set Off The Bug
The Optimism team carried out an analysis to unravel the cause of the problem. After careful evaluation, the team discovered that the system breach was not a direct attack on the network. An employee of Etherscan unknowingly activated it at a particular time. According to the report, the ETH generated are not usable.
After the announcement of the bug, Optimism rallied its team. It swung into action by developing and deploying security updates on some critical blockchain networks, fixing the discovered lapse and sending alerts to various teams on the Layer-2 project to be more careful to forestall future incidents like the recent event. Aside from the statement, Optimism also published a detailed account of what happened to one of its networks.
The $2 million paid out to the white hat hacker, Jay Freeman, was part of Optimism’s bug reward plan, which peg the maximum bounty amount to $2 million. And going by the report that Optimism paid the maximum bounty price to the hacker shows how serious the critical bug is to the Ethereum Layer-2 chain. Moreover, the statement by Optimism did not indicate any loss recorded when the malicious hacker attempted to take advantage of the incident.
Security Becoming Complex As DeFi Keeps Growing
A blog post from Optimism has revealed the complexities of developing a strong security network for safeguarding the DeFi space partly because of decentralization in the industry. According to the statement, it is becoming clearer that as the DeFi is growing at a high rate, protecting it will be too practical. Such an inadequate security mechanism is one of the consequences of decentralization in the industry that has not been addressed.
Nonetheless, the team at Optimism is currently working hard to develop and specify the next crucial upgrade to its network to make it safer for use.
As revealed by Optimism, the latest Bedrock Edition upgrade is set to go a long way to close the gap in the code base between most of the critical parts of the chain. Failure to upgrade a greater part of the initial code for the system makes it easy to be bugged.