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DeFi
Nomad Bridge to Relaunch and Provide “Partial” Refunds via NFTs
Nomad Bridge, a cross-chain bridge protocol that was exploited for $190M earlier this year, is set to relaunch and provide partial refunds to affected users.
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Nomad Bridge is set to relaunch and partially compensate the users affected by the $190 million exploit earlier in 2022, according to an announcement on Medium. Users can go through the KYC verification process to receive their compensation through a special NFT, the protocol explained.
Affected Users Can Access Recovered Funds Through a Unique NFT
Cross-chain messaging protocol Nomad is preparing to restart its bridge and reimburse those who lost funds following the $190 million hack in August, according to the announcement. The Nomad team said it “has been working hard on recovering funds and making the necessary updates to safely relaunch the Nomad Token Bridge.”
To apply for reimbursements, users must complete the Know Your Customer (KYC) verification process via CoinList. Nomad explains the process plays a vital role in ensuring the payments adhere to the compliance norms.
“In order to access recovered funds, all users must successfully complete the KYC/AML verification process and link their wallet address(es) to their Coinlist account. This is necessary so we can be certain that recovered funds are accessed in a compliant manner.”
After completing the verification process, users will receive a unique non-fungible token (NFT) that accounts for the proportional share of recovered funds on Ethereum. Further, these tokens are non-transferable and will allow users to receive the remaining funds that are recovered in the future.
The Nomad team explained that the amount of recovered funds that users will be able to receive “will be determined based on pro-rata shares of recovered funds.” To explain pro-rata shares, Nomad provided an example: “if 10% of the total exploited ETH has been recovered, and Alice has an NFT that accounts for 20 ETH (what she originally bridged from Ethereum), Alice will be able to use her NFT to access 2 ETH.”
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DeFi Still in Hackers’ Crosshairs
The relaunch comes four months after a major exploit of the Nomad Token Bridge that allowed hackers to siphon $190 million worth of crypto funds. The perpetrators were able to exploit the bridge due to a critical vulnerability that allowed anyone to steal funds.
The hack was one in a series of attacks on decentralized finance (DeFi) protocols – a trend that emerged in 2021. FBI warned investors earlier this year after Chainalysis reported that hackers stole $1.3 billion of crypto funds in Q1 2022.
More recently, a Solana-based protocol Solend suffered a $1.26 million exploit following an oracle attack that resulted in bad debt, according to PeckShield. Solend confirmed the attack, saying the hackers targeted three of its lending pools.
How can we better protect DeFi from hacks and exploits? Let us know in the comments below.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
