Solana Hit By $1M Exploit: Cyber Protocol Smart Contract Frozen

• Solana’s Cypher Protocol has been exploited for $1 million, leading to a freeze in the smart contract and a community outburst.
• Unconfirmed reports suggest that the exploiter may have used Binance exchange both for funding their wallet and cashing out.
• The incident has triggered criticism from the Solana community, casting a shadow on the network’s previously good standing with users.

Solana’s Cypher Protocol Exploit

Solana (SOL) blockchain’s Cypher Protocol was recently exploited for up to $1 million, leading to a freeze in its smart contract and an outcry from the community. The protocol is currently negotiating with the exploiter about potential “next steps” towards recovery of funds.

Cypher Protocol’s Response

In response to this exploit, Solana immediately froze its smart contract to begin interventions towards recovering stolen funds. It also appealed to the hacker for negotiations regarding “potential next steps”. Crypto researcher Messari highlighted that despite this incident, Solana had achieved impressive growth in total value locked (TVL) of 15% last month — more than other major blockchains like Ethereum and Binance Smart Chain saw declines in TVL during the same time frame.

Details and Community Backlash

Unconfirmed reports indicate that the hacker may have funded their wallet and cashed out through Binance exchange, prompting appeals for assistance from Changpeng Zhao, CEO of Binance. As one of Solana’s most advanced protocols offering incentives to traders and depositors alike, this exploit has caused great concern within the community — damaging Solana’s previously good standing among users.

Liquid Staking Criticism

The incident has also prompted criticism against Liquid Staking — a new staking model introduced by Cypher Protocol just days before it was hacked — which some argue may have made it easier for hackers to take advantage of loopholes in security protocols on Solana blockchain.

Potential Solutions

The team is currently working towards resolving this issue and restoring confidence within the network; however proposing any solutions will be challenging given how quickly transactions take place on Solana blockchain (7-second blocks). In addition, there are concerns that if sufficient funds cannot be recovered then SOL token holders might face losses due to reduced liquidity as well as increased volatility due to decreased market capitalization compared with other major blockchains like Ethereum or BSC.