A leading omnichain tokenization platform, Holograph, fell victim to a significant smart contract exploit, leading to the loss of 1 billion HLG tokens with an estimated value of $7 million.
In the aftermath of the exploit, the project’s native HLG token saw a drastic 80% decrease in value over the past 24 hours, dropping to as low as $0.0029 before slightly recovering to $0.0068 at the time of writing. These tokens had been airdropped to the community back in May.
Holograph is known for its innovation in facilitating token transfers across different blockchains while keeping the original contract address intact. The platform had garnered funding from prominent investors like Animoca Brands and Mechanism Capital.
The hack involved the compromise of Holograph’s Holograph Operator Contract by an unknown malicious actor, who managed to mint the staggering amount of tokens. While the initial exploit has been addressed, the Holograph team is actively cooperating with exchanges to freeze the compromised accounts and have launched an investigation, with intentions to involve law enforcement.
Reports from blockchain security platform Cyvers indicated that some of the stolen tokens were exchanged for the stablecoin USDT, which the hacker then used to acquire 300 ETH. The funds were subsequently distributed to various addresses, including some associated with privacy protocols like Tornado Cash and Railgun.
Despite these transactions, data on the blockchain reveals that the exploiter still retains around 47.59 ETH, valued at roughly $167,000 currently.
Speculations from DeFi researcher Matt Casto of CMT Digital suggested that the attacker may have been a rogue developer who funded the address weeks prior and was the recipient of the minted tokens.
This incident occurred amidst Holograph’s recent upgrades to its ecosystem, including a planned transition to LayerZero V2 to bolster cross-chain security and introduce support for new chains such as Sei, Blast, Solana, Ton, zkSync, and ZetaChain.
