Why Polkadot Fell 10% This Weekend
The Polkadot (CRYPTO: DOT) cryptocurrency took a 10% dive over the weekend. This time, the crypto-bridging coin saw a security incident. An attacker exploited Hyperbridge, a protocol that moves tokens between Polkadot and Ethereum (CRYPTO: ETH) to generate 1 billion Polkadot tokens out of thin air. In theory, the hack could have been worth more than $1 billion.
The hacker found a security weakness in one of Hyperbridge's smart contracts, which skipped one security-checking step among many. As a result, one Hyperbridge transaction was duplicated many times over, letting the attacker generate 1 billion fake DOT tokens.
The real damage was limited to $237,000, though. Hyperbridge only had access to 108 Ethereum's worth of liquidity in this specific Polkadot-to-Ethereum link, so that's all the attacker could convert to real-world dollars in the end. Limited liquidity can be an operating problem, but also a damage-limiting security safeguard.
Source Fool.com
