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In a Twitter post, layer-2 blockchain protocol Optimism shared that the hacker who exploited a transfer error has refunded most of the stolen OP tokens as promised. This comes two days after the attack and less than a day since the attacker awarded 1 million coins to Ethereum co-founder Vitalik Buterin.
Hacker Withholds 2 Million OP Tokens
The hacker returned only 17M tokens, worth roughly $15 million; this falls 3M short of the stolen 20 million. According to information on Etherscan, Optimism received the funds in 17 different 1 million token transfers.
Of what would be the 3M remainder, the attacker transferred 1 million coins to Vitalik Buterin, as stated earlier.
They also swapped a third of the OP tokens for ETH, leaving another million ($910,000) in their wallet. Optimism acknowledged the withheld 2M tokens in their announcement tweet, calling it the hacker’s “bounty.” The foundation is currently working to obtain the Optimism tokens Buterin received and has assured users of updates as events unfold.
A Recap of the Exploit
The hacker came by the funds due to a transaction error on Wednesday, 8th June. The Optimism foundation had attempted to send the 20 million tokens to the liquidity provider and market maker Wintermute. The coins were to function as governance tokens for the platform’s newly launched Decentralized Autonomous Organization, the Optimism Collective DAO.
Hey folks—in the interest of transparency (😉,😅), the address has returned a majority of the OP, and @wintermute_t has committed to reimbursing the Optimism Foundation for the remaining 2mm OP, which was kept as a bounty.https://t.co/jtElgPdNPk
— Optimism (✨🔴_🔴✨) (@optimismPBC) June 10, 2022
Optimism had brought Wintermute onboard to facilitate its oncoming airdrop. While Optimism is a layer-2 protocol, recipient Wintermute has a layer-1 address which has to be synced with Optimism’s L2 addresses.
Subsequently, the market maker failed to synchronize the addresses causing Optimism to send the funds to the wrong one. At the time, Wintermute claimed the funds were secure and could be recovered as they were floating. Unfortunately, the hacker was able to take advantage of the error and transfer the tokens to their address.
OP Price Briefly Dips After Hack, Bounces Back
The hacker has not disclosed their reasons for sending the tokens to the Ethereum creator. However, they sent an on-chain message alongside the coins expressing plans to return the stolen funds. The attacker was oddly perky, apologizing for the missing 2M and ending the note with a cheerful:
Notably, this followed a threat from the Wintermute team. They affirmed their determination to track down the funds if the hacker failed to return them within a week. The market maker was swift to own up to their mistake and later expressed admiration for the attacker’s response.
The attack prompted OP holders to sell off their tokens, fearing the hacker would dump the funds in the market. The sell-off triggered a decrease in price as Optimism plunged to a record low of $0.72. However, given recent events, traders have regained their trust in the token. Its value jumped by 5% over the last day to trade at $0.91 at writing.