Cork Protocol loses $12M in exploit; 3,760 wstETH stolen

Cork Protocol suffered a $12 million hack, and attackers stole 3,760 wstETH.

Cybersecurity company SlowMist flagged a suspected smart contract issue affecting 3,760 wrapped staked Ethereum on Wednesday, May 28.

In response to the report, Cork Protocol acknowledged a “security incident” impacting both wrapped staked Ethereum (wstETH) and wrapped Ethereum (wETH) tokens.

To mitigate further risk, the protocol temporarily disabled the smart contract.

Cork Protocol assured users that the breach affected only the specified markets and did not extend to other platform markets.

The team is actively investigating the issue and will release further information soon.

Blockchain security firm Cyvers stated that the attacker deployed a malicious contract originating from the address funded by 0x4771…762B.

Cyvers claims that a service provider likely owns this address, meaning Cork Protocol was utilizing a DeFi protocol, exchange, or bridge linked to it.

Within 16 minutes, the attacker ran the malicious contract and rapidly swapped the wstETH for Ethereum.

So far, the attacker has not moved the stolen ETH from its current wallet.

Cork Protocol provides users with a way to hedge against the potential depegging of tokens, including wrapped stablecoins, liquid staking, and restaking tokens.

The protocol protects the core market of the wstETH/weETH trading pair.

Since users can perform decentralized finance tasks with wrapped tokens that native tokens do not permit, wrapped tokens offer distinct benefits.

However, users must recognize heightened risks, including counterparty concerns, smart contract vulnerabilities, and the chance of exploits.

If a hack or rug pull occurs, holders might see the wrapped token fall below the worth of its unwrapped counterpart, resulting in considerable losses.

Users can secure their assets on Cork Protocol by purchasing depeg swaps when the value dips below the peg.

The platform offers securitization beyond wstETH and weETH to include wETH to wstETH, sUSDS to USDe, and sUSDe to USDT.

Core Protocol has stated they would publish a postmortem soon.