Zilliqa Identifies and Mitigates Exploit on X-Bridge Platform – BitRss

On February 6, 2025, Zilliqa identified an exploit on its X-Bridge platform, which leveraged a vulnerability in one of the platform’s newly introduced token manager contracts. This exploit allowed an attacker to mint Zilliqa-bridged versions of native currencies on Ethereum and Binance Smart Chain (BSC) without locking the corresponding assets on these networks.

Through this vulnerability, the attacker generated 531 Zilliqa-bridged ETH ($2,732.95) (zETH) and 2.2133 Zilliqa-bridged BNB ($650.10) (zBNB). The attacker then executed several transactions, including bridging 123.116 zETH back to the Ethereum network and 2.2133 zBNB back to BSC. Additionally, 140.3780 zETH was sold on ZilSwap for USDT ($1.00) $42,000 and 0.0718 zWBTC, which was subsequently bridged back to Ethereum and liquidated.

Immediate Response and Security Measures

Upon discovering the exploit, Zilliqa took immediate action to mitigate further risks. The bridge relayer was shut down, and all related token manager contracts were paused. Switcheo, the operator of ZilSwap, was promptly notified of the issue affecting its zETH pool. Zilliqa issued a public notice announcing the exploit and warned users against trading zETH on ZilSwap. A security warning was also issued via the X-Bridge user interface, and Switcheo disabled zETH pools on ZilSwap.

Corrective Actions and Future Plans

Zilliqa is implementing several corrective actions to bring X-Bridge securely back online and mitigate the effects of the exploited zETH and zBNB contracts. The affected zETH token will be deprecated, and a new zETH token will be deployed, retaining legitimate token balances as of Zilliqa mainnet block number 4465720, while removing the invalid tokens associated with the attacker.

Users who did not participate in the attack and did not buy zETH after the announcement of the incident will not be affected, as their new zETH token balance will be prepopulated with their old zETH balance at this block number. Those who purchased zETH after the exploit but before the issue was announced should contact the Zilliqa team with their transaction details if there is an issue with their zETH balance.

Operating X-Bridge in a Restricted Capacity

X-Bridge, implemented for compatibility with the legacy Zilliqa network, was extended to allow bridging of tokens formerly listed on ZilBridge to supported networks. Following this exploit, the affected X-Bridge contracts will be upgraded to enforce stricter balance checks before minting bridged assets, preventing unauthorized token creation.

In the short term, X-Bridge will be brought back online in a limited capacity, operating under restrictions to ensure security and reliability. This means bridge transactions may experience delays as full functionality is restored in a secure environment. A small number of legitimate X-Bridge transactions are currently stuck and will be processed once X-Bridge returns to operation.

Zilliqa remains committed to the security and integrity of its ecosystem. The platform is set to resume operation in the near future, with notifications to users once reactivated. For further updates, users are encouraged to stay tuned to Zilliqa’s official channels. More details can be found here.

Why This Matters: Impact, Industry Trends & Expert Insights

Zilliqa’s identification and mitigation of an exploit on its X-Bridge platform, which allowed unauthorized minting of bridged tokens, underscores the ongoing challenges in securing cross-chain bridges against sophisticated threats.

Recent industry reports indicate that the prevention of cross-chain bridge exploits remains a critical challenge in the Web3 ecosystem. This aligns with Zilliqa’s swift response to the exploit, highlighting the importance of implementing robust security measures and regular audits to prevent such vulnerabilities.

A CCN report highlights that crypto bridge exploits have a significant impact on market confidence, as they reveal vulnerabilities in blockchain infrastructure. This supports the need for Zilliqa’s corrective actions and future plans to restore trust and ensure the security of its X-Bridge platform.

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