Cardano founder Charles Hoskinson made a statement following the security incident in the Midnight ecosystem that led to a sharp drop in the price of the NIGHT token. Hoskinson stated that the attack did not affect the Midnight protocol or the NIGHT smart contract on Cardano, but rather the problem occurred in the third-party bridge infrastructure.
Hoskinson stated, “Midnight itself wasn’t hacked. NIGHT’s smart contract on Cardano wasn’t hacked. What was hacked was the third-party bridge.”
Hoskinson stated that initial findings indicate the incident is entirely limited to the Wanchain infrastructure, noting that the system has four core components—on-chain and off-chain—running on Cardano and BNB Chain. He emphasized the need for a comprehensive audit to determine which component was affected and how the vulnerability was exploited.
Hoskinson stated that they were awaiting an explanation from the Wanchain team, saying, “Questions must be answered and audits must be conducted. We will get to the truth about why this happened, who is responsible, how much the loss is, and how the damage will be remedied.”
Cardano’s founder also warned that similar attacks could become more frequent in the future due to advancements in artificial intelligence technologies. Hoskinson stated that AI has made significant progress in the field of information security, noting that vulnerabilities in systems can be found and fixed much faster than humans can.
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Hoskinson, who noted that he has been in the cryptocurrency sector for 15 years, said that the sector has started to become desensitized to these events due to the constant attacks and bridge security problems. Stating that this situation seriously undermines consumer confidence, Hoskinson argued that there is a need for next-generation financial infrastructures.
According to Hoskinson, the NIGHT project aims to combine the regulatory mechanisms, insurance products, and asset recovery capabilities of the traditional financial system with the features of cryptocurrencies, such as individual custody and self-sovereign identity. Hoskinson stated that this model aims to give users back control over how their money works.
Hoskinson stated that the NIGHT token has begun to recover after the sharp drop, indicating that the Midnight ecosystem has overcome its first major crisis. Hoskinson commented, “NIGHT experienced its first major event and emerged stronger. Midnight has begun to recover and has passed its first major test.”
*This is not investment advice.
Continue Reading: Cardano (ADA) Founder Charles Hoskinson Speaks Out for the First Time Following the Hack