Written By: Asmit Murmu
Much chaos has ensued over the last few days. The cause being the Solana wallet hack that played out resulting in a loss of around $8 million affecting over 7,000 unique wallets. In this post, we will go over the exact details of what went down in the whole fiasco and what you can do to prevent something like this happening to you.
ll About The Hack
Though it seems from the title of the hack that it was the Solana network that suffered, that is far from the truth. At its core, the actual attack vector of the hack was Slope mobile wallet, an SPL-based wallet. So far the consensus is that the hack was caused due to “an iOS supply chain attack” as mentioned by the Solana Labs co-founder Anatoly Yakovenko. A supply chain attack happens when an attacker can access a victim’s account by targeting a third-party vendor. The third-party vendor in this case was Slope wallet.
You might ask if it is really just because of Slope wallet, why have other wallets got affected? Well, turns out most of these affected Slope wallets had interacted with other hot wallets in the Solana ecosystem spreading the span of the hack even further. However, as has emerged from the analysis of various security firms, no hardware wallets/cold wallets have been impacted in this hack.
As a security measure, Slope Finance has instructed its users to create a new and unique seed phrase and transfer all their assets to the new one. On the bright side, however, there has not been any indication yet that the hack has spread beyond the Solana ecosystem.
What Should Users Do?
In the short term, if you are a user of Slope Finance, do as the community team instructs. As of now, as I had mentioned earlier, they have asked users to create a new seed phrase and send over their assets to the new one. If you have an SPL-based wallet but not Slope wallet (eg., Phantom, Trust, etc.), check if you have indulged in any transaction with a Slope wallet. If yes, create a new seed phrase and transfer your assets to the new one. If not, you should be safe. However, just to be on the safe side, you might as well create a new wallet even if you have not interacted with a Slope wallet in the past.
In the bigger picture, in my opinion, this highlights the issues related with hot wallets and the need to upgrade to a cold one. For the uninitiated, hot wallets are those wallets which are forever connected to the network (eg, Phantom, Metamask, etc.) As for cold wallets, these are not forever connected to the network. They come in a hardware form (eg, Ledger, Trezor, etc.)
Here’s a list of measures that you should take in general to protect your wallet:
- Store you funds in a cold wallet: Cold wallets are safe because except you nobody else has access to your private keys. On the other hand, most hot wallets grant access rights wallet providers to user private keys.
- Keep your private keys in secrecy: There are two keys associated with any wallet: public key and the private key. The public key is used for locating your wallet in transactions. While the private key is what you use to validate transactions.
- Don’t use centralized exchange wallets for fund storage: When you store funds in a wallet provide by an exchange, the exchange also has access to your private keys. So it’s advisable not to use such wallets for storage purposes.
- Avoid public WiFi: Connecting to a public WiFi might result in leakage of sensitive information to the attacker including your private keys.
- Beware of phishing attacks: Many hackers would try to get access to your private keys by building a fake website and getting you to click something.