The Solana blockchain was struck by a massive hacking theft on Tuesday night, with a wide section of the blockchain's ecosystem believed to have been compromised.
As of Wednesday morning, at least 8,000 wallets across a number of projects on the Solana blockchain have been drained of funds. According to blockchain security company PeckShield, estimated losses by affected investors currently exceed $8 million.
Given the hack is still fresh at the time of writing, the incident is still under investigation and there are many details missing. However, Solana co-founder Anatoly Yakovenko tweeted that the incident seemed to have been "an iOS supply chain attack" that managed to ensnare android users as well. Confirmed victims had been tied to one of two wallets; most victims had used the Slope wallet, while others used Phantom.
Currently, there is speculation that the attack may have originated from a vulnerability within an app on the Solana ecosystem, rather than the core code of the blockchain itself. The Beanstalk hack that occurred earlier this year bares many similarities to this theory, with hackers using a bug in Beanstalk's code to trick it into draining all of the project's wallets.
The hack is certainly unwelcome news for Solana, even if the security breach wasn't due to vulnerabilities in the blockchain itself. The still-recent crash of the Luna blockchain and the lukewarm reception to its slimmed down revival underlines the increasing aversion to security risks that many crypto investors are beginning to have.
Solana is often touted as the "next Ethereum" due to its stability and energy efficiency compared to Ether or Bitcoin and has a rapidly growing market share to match its reputation. This will likely help insulate the blockchain against becoming the next Luna, providing that no evidence arises pinning the blame for the breach on Solana itself.
As with any investment that just revealed greater risks than investors thought, Solana's is still taking losses from the hack. Solana's SOL coin was sent plummeting overnight on Tuesday and recovered somewhat during trading on Wednesday. Investor reactions on social media seem to be mixed between derision and support.
Like other crypto projects, Solana also faces the potential of increasing regulatory scrutiny; a risk heightened by the company's major security breach. Recent comments by Treasury Secretary Janet Yellen and moves by the SEC to expand its crypto enforcement unit highlight a growing desire by regulators to establish firmer oversight of the de-fi sector.