Jump Crypot’s ‘reverse hack’ of the Wormhole bridge

Crypto is a technology, but for many it is also a religion. If you doubt it, consider the prophet-like status accorded to Satoshi, the memes and iconography surrounding each blockchain, or the sectarian rivalry between hardcore supporters of Bitcoin and Ethereum. And like any religion, crypto has sacred values ​​- the highest of which is decentralization.

I bring all this up in light of venture capital investor Jump Capital’s successful bid to steal back $140 million worth of Ethereum from a hacker who, in one of the biggest heists in crypto history, last year stole a flimsy piece of software called Wormhole Bridge. There’s a lot more to the story, but the long and short of it is Jump used blockchain to track the stolen funds of Oasis, a DeFi wallet software provider, and then relied on Oasis to tamper with its smart contracts to take return funds. The episode was hailed as a brilliant “reverse hack” on Jump’s part, but also raises tough questions about decentralization — or rather, the lack of it in the realm of DeFi, a field meant to embody crypto’s highest value.

As Web3 skeptic Molly White explained in a thoughtful essay (cited in yesterday’s news roundup), “reverse hack” involved a wealthy and connected investment firm leaning on another corporate entity to modify a smart contract. Such contracts are seen by many in crypto as immutable and immutable—a system that reflects the “code is law” ethos that forms another touchstone for cryptotheology. But as White points out, many smart contracts are actually built with loopholes that can be invoked by people with the right connections.

The practical result of the Jump episode, it should be noted, is good. The wormhole hacker is a criminal and a thief, and even if you have little sympathy for venture firms, it’s a good thing for crypto and investors that Jump stole the money back. But the result also emphasizes how crypto’s most sacred value often exists more as dogma than as reality. As White correctly observes, Jump’s power play is hardly the only example. She points out that even the most decentralized projects – Bitcoin and Ethereum – are subject to great influence from charismatic founders and elite cliques of coders.

However, all this is not a reason for disillusionment. Crypto is hardly the only religion whose high priests regularly violate the same moral codes they preach. Religions of all kinds are inspired by divine ideals, but are nonetheless run by human beings who are subject to the same temptations and moral failings as everyone else. But that doesn’t stop people from trying to stick to sacred values ​​– decentralization in the case of crypto – as best they can.

Jeff John Roberts
[email protected]
@jeffjohnroberts

DECENTRALIZED NEWS

Reddit has rebranded NFTs as “digital collectibles” amid a broader push by branding experts to avoid “toxic” terms associated with the latest crypto crash. (Decrypt)

Bitcoin is poised to achieve a 2% increase for February after a 39% increase in January. (Bloomberg)

Crypto conglomerate DCG lost $1.1 billion in 2022 as a result of falling asset prices and exposure to bankruptcy Three Arrows Capital. (Coindesk)

NFT powerhouse Yuga Labs launched TwelveFod, its first batch of collectibles minted for the Bitcoin blockchain. (The block)

Robin Hood revealed that they received a subpoena from the Securities and Exchange Commission related to the crypto business last December. (Fortune)

MEME O’ MOMENT

Gary Gensler, Crypto Meme Machine: