Charli3 — Update : post Nomad Hack

The Nomad bridge hack in the mid evening of August 1st surprised us all. A flurry of worry and emotions hit many communities upon hearing the news that the projects they support and have invested in may be in danger. However, communication has been at the forefront of our efforts to educate the communities on the specifics of the events that unfolded.

The History:
The Nomad Bridge, along with Milkomeda, teamed up to bring ERC20 bridging possibilities to Cardano. Nomad holding the contracts for ERC20 deposits, and Milkomeda holding the Cardano Native Token (CNT) equivalent to be distributed to users of the bridge from Ethereum to Cardano.

Charli3 supported the use of this bridge for users to be able to transfer their tokens to Cardano in a long-awaited migration event. At this point, Charli3 openly communicated that they would no longer support the ERC20 token, burned their ~56million remaining supply, and suggested all to bridge over to CNT where the full supply of 100million has been minted. Liquidity left on ERC20 was only user held and could be removed at any moment by those users, potentially leaving users without a way to liquidate ERC20 tokens. The plan was to keep the bridge open as long as possible to allow long-term holders and occasional wallet checkers the ability to swap to the supported CNT whenever they wanted. However, things changed with the bridge hack.

The Hack:
The quick details are thus-

  • A hacker managed to infiltrate the Nomad Bridge, gaining access to the ERC20 tokens held in Nomad contracts from users who had previously swapped theirs for C3’s Cardano Native Token (CNT). An ERC20 token burn mechanism was planned when swapping to C3 CNT, but it was not possible with the bridge infrastructure.

The Problem:

The project and community investments were not affected, but what to do now with ERC20 holders since there is no bridge?

The leadership decision:

  • ERC20 tokens bought post-hack will not be supported by Charli3

Future Bridging:

  • Bridging solutions are not simple, and, as we’ve seen, vulnerable to attacks. A future bridging solution will be worked on when the team has the time and resources to ensure a safe option is available.

Additions:

  • CMC now tracks the price of the CNT from Sundaeswap, and Minswap. it is NOT the price of the ERC20 token. Always check the sources first.

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