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Tuesday, December 6, 2022

Optimism Lost 20M Tokens Post Exploitation Confusion Of L1 & L2

Despite there being an airdrop just a couple of weeks back, issues in Optimism have already started emerging. Problems related to the scaling issues of the vaunted layer-2 team as well as a market maker. 

Happy days for the scaling solution of layer-2 of Optimism no longer prevails. This is mainly due to the reason that the smart contract of the market maker has now resulted in a 20 million loss of Optimism tokens. This huge exploit happened on 26th May but it was reported much later to the entire community. 1 million tokens worth a huge $73000 had been transferred to the Ethereum address on OP of Vitalik Buterin towards the beginning of the day at around 12:30 A.M. UTC. The rest of the tokens remain dormant so far but might be sold or used at any moment to manipulate the decisions of the governance. 

The Exploitation Of Optimism Tokens 

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Native tokens of Optimism belong to the L2 (layer-2) blockchain. In addition, a part of this supply had been airdropped to the users of their network on 1st June. L2 solutions also aided in lifting congestion from the L1 (layer-1) blockchain including Ethereum. 

Details Of OP Oversight 

The summarised detail of the events that took place on Thursday was reported by the team of OP. They mentioned that tokens of almost 20 million were going to be utilized by a market-making crypto firm named Wintermute. The Op team delivered the entire token collection following 2 test transactions with them. 

Things went erratic when Wintermute was unable to access OP tokens due to a smart contract that only accepted L1 tokens since they did not update the system to L2. Due to this oversight in the contract, the entire failure happened. Wintermute took complete responsibility for this exploit and announced that they will try to compensate as much as possible.

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