Ethereum scaling startup Layer-2 Optimism (OP) said Wednesday that an attacker interfered with the token recovery process associated with Wintermute (the project’s partner fund), resulting in the loss of approximately 20 million OP governance tokens, an estimated $20 million.
The OP token launched at the end of May as part of Optimism’s plan to decentralize the way the protocol is run. An airdrop was held on May 31st, and some of the total OP tokens were spent providing external support.
According to blog posts from Optimism, “Optimism Foundation joined Wintermute for Liquidity Services in an effort to facilitate a smoother experience for users purchasing OPs to participate in Collective Governance. To fulfill this commitment, an interim grant of 20 million OP tokens is allocated to Wintermute from the Foundation’s Partner Fund. “
But things took a turn for the worse when Wintermute mistakenly provided a multi-signature Ethereum address that was not yet deployed on Optimism. In his explainer post, Wintermute founder and CEO Evgeny Gaevoy said the multi-sig address is a Gnosis secure address.
This person has now sold 1 million OP tokens and will probably do the rest. Wintermute bought those 1 million OP tokens and plans to buy more when the attacker tries to sell them.
“We want to make it clear that the original bug is 100% Wintermute’s fault and as such we will proceed to buy OP every time an attacker sells it to eventually perfect the protocol. We understand it could potentially create price volatility for the token and will make every effort to reduce the severity.”Evgeny Gaevoy – CEO of Wintermute
The Optimism project development team also gave Wintermute a 2nd support by sending back 20 million OP tokens so they can continue their work while things are going. The next action is unknown at the moment, but the incident caused the OP to plummet from $ 1.1 to $ 0.7, causing many investors to panic.