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Jump Crypto Replaces Over $320M of Wormhole Wrapped ETH in DeFi Bailout

Wormhole, a bridge which facilitates asset transfers across seven different blockchain, got hacked on Feb. 2 to the tune of over $320M as a hacker minted 120,000 worth of a version of wrapped Ethereum on Solana. One day later, the funds are back. 

Jump Crypto Replaces Over $320M of Wormhole Wrapped ETH in DeFi Bailout

It’s almost like it never happened. 

Wormhole, a bridge which facilitates asset transfers across seven different blockchain, got hacked on Feb. 2 to the tune of over $320M as a hacker minted 120,000 worth of a version of wrapped Ethereum on Solana. One day later, the funds are back. 

Jump Crypto, the crypto arm of trading firm Jump Trading which launched last year, has come to the rescue, replacing the 120,000 worth of ETH. This means wETH, Wormhole’s token representing ETH that was bridged from the Ethereum mainnet, is backed by actual ETH. Jump Crypto decided to step in because it “believes in a multichain future,” the trading firm said in a tweet

“All funds have been restored and Wormhole is back up,” the token bridge added on Twitter. “We’re deeply grateful for your support and thank you for your patience.”

The hack underlines the risky nature of some of the still experimental infrastructure that’s being built to connect the flurry of blockchains that are emerging to meet rising demand for crypto and decentralized applications. DeFi is a global ecosystem with no governments behind it, so protections need to be market and tech based, and bailouts will come from private, self-interested parties. 

“Think we’re understating the significance of the Jump reimbursement, “ Foobar, a well-known blockchain developer, tweeted. “Positive-sum bailouts at scale and speed rarely seen elsewhere. At risk of hyperbole, we’re seeing the emerging beginnings of nationstate-scale entities that rival traditional governments/regulators.”

Jump Crypto Speculation

Even before the announcement came out from Wormhole, speculation swirled that the 120,000 ETH would be covered by some combination of crypto exchange FTX, Jump, and some VC firms, all of which have deep ties with Solana. 

Jump Trading bought Certus One, which helped develop Wormhole last August before the bridging solution went live. Certus One’s Github account features a repository which it describes as a “reference implementation for the Wormhole interoperability protocol.” 

That speculation kept the wETH price from collapsing in the hours after the attack. 

“It would have caused problems for the Solana DeFi ecosystem (in which Jump and other VCs have large investments),” Freddie Raynolds, a pseudonymous and frequent DeFi commentator, told The Defiant over Twitter messages, adding that Jump has made an investment in other high profile projects like Terra so in supporting Wormhole the trading firm is sending a message of support to all projects to which it has deployed capital. 

Wormhole launched in August 2021 as a piece of crypto infrastructure which would enable interoperability of value between blockchains. The project has over $1B in total value locked (TVL), according to its website.  

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