Crypto Bridge Nomad Exploited for $190M in ‘Frenzied Free-for-All’

In one of the most extensive hacks since Axie Infinity's Ronin Bridge Sidechain in March, an exploit on the Nomad token bridge has allowed attackers to rob the bridge of roughly $190 million.

Security firm PeckShield told Decrypt that the funds stolen were denominated in Ethereum, USDC, DAI, FXS, and CQT.

"We are aware of the incident involving the Nomad token bridge. We are currently investigating and will provide updates when we have them," Nomad tweeted Monday afternoon.

The Nomad bridge is a protocol allowing users to move digital assets between different blockchains, including Avalanche (AVAX), Ethereum (ETH), Evmos (EVMOS), Milkomeda C1, and Moonbeam (GLMR).

While details from Nomad are scarce, some have pointed to a configuration error in a smart contract that Nomad uses to process messages as the cause, allowing millions to be drained from Nomad's liquidity pool. 

"It all started when @officer_cia shared @spreekaway's tweet in the ETHSecurity Telegram channel," Sam Sun, a researcher at crypto investment firm Paradigm, tweeted. "Although I had no idea what was going on at the time, just the sheer volume of assets leaving the bridge was clearly a bad sign."

"It turns out that during a routine upgrade," Sun continued. "The Nomad team initialized the trusted root to be 0x00. To be clear, using zero values as initialization values is a common practice. Unfortunately, in this case it had a tiny side effect of auto-proving every message."

Nomad bridge attack ‘a frenzied free-for-all’

Sun likened what happened next to “a frenzied free-for-all” because it took little technical knowledge to leverage the exploit. 

“You didn't need to know about Solidity or Merkle Trees or anything like that,” Sun wrote. “All you had to do was find a transaction that worked, find/replace the other person's address with yours, and then re-broadcast it.”  

Similarly, blockchain security firm Certik reported that attackers could exploit the bug by simply copying and pasting transactions. The firm added that people could exploit the upgrade “by copying the original hacker's transaction calldata and replacing the original address with a personal one.”

In this way, the bridge was drained of nearly all of its funds.

"Nomad's bridge got owned in a similar manner to Qubit's QBridge," tweeted a16z security engineer Matt Gleason. "An insecure configuration of the bridge caused a specific path to allow any transaction sent. The error is inside the Replica's ‘process’ function."

"The system will accept any message that it has never seen before and process it as if it were genuine, meaning that all you need to do is ask for all the bridge's money and you'll get it," he added.

According to the FTC, cyberattacks against crypto projects appear to show no sign of slowing down, with over $1 billion in crypto stolen since 2021.