The Ethereum-based layer-2 scaling solution and a non-profit organization ‘The Optimism Foundation’ faced a mishap with its governance token. Recently, they launched their Optimism token (OP) on various certified centralized exchanges where it faced a serious issue. According to the reports, 20 million OP governance token which was meant for the liquidity pool provider Wintermute was stolen from the chain.
A third-party liquidity provider Wintermute accidentally sent an unauthorized or should it be said unverified wallet address to the sender party to gain access to 20 million governance tokens. A complete awry situation has been raised for Wintermute as it relies on Ethereum layer-1 multi-signature technology whereas Optimism runs as a layer-2 solution.
The crypto market maker Wintermute provided their layer-1-based Ethereum wallet address to get the tokens. As Optimism released their 20 million tokens, it got sniped by the attacker in between the transaction. In the course of action, Optimism made sure of the address by sending 1 OP to the provided address.
The brilliant attacker took the advantage of the incompatibility between the addresses and diverted the $17.6 million worth of 20 million OP tokens to an unknown address. Following to this the hacker successfully held selling of 1 million in ETH later with Tornado cash.
Unfortunately, Wintermute, all efforts to switch to layer-2 went useless in order to recover the funds. It has taken complete responsibility for this major mishap and has requested the attacker to return the tokens within a span of 1 week.
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Wintermute action on the recovery plan
However, looking to the active mindset and provided skill set that the attacker pursuits, Wintermute has offered a consulting offer to the same. There is no further update from the hacker side on the given offer yet. Moreover, after the attacker opened the sale of the token, Wintermute quickly purchased 1 million tokens.
However, this will largely impact the overall pricing of the governance token OP in the market. Meanwhile, the Optimism token OP is running at $0.8233 and the price has dropped to 16% at the time of writing.
Wintermute is working with Gnosis Safe Team to assess the transfer. The team will also help the market maker agency to recover the lost OP tokens.