Secret Network bridge exploited for $4.7M with ‘infinite mint’ bug
An attacker has used an “infinite mint” bug in a vulnerable smart contract on the Secret Network to create unbacked, wrapped versions of Axelar-wrapped assets, resulting in a $4.67 million exploit.
The exploit happened on June 10 but was discovered a week later on June 17, after a failed cross-chain transaction caused by an “insufficient funds” error in the drained account was detected, blockchain research firm Common Prefix reported on Friday.
The attacker redeemed the Axelar-wrapped assets (saTokens) back over legitimate channels to drain the real Axelar-wrapped assets held in escrow because the smart contract did not verify the source of the inbound transfer before minting, so “deposits forged over an attacker-controlled channel minted genuine saTokens with no assets backing them,” Common Prefix said.
It is the latest in a series of crypto protocol hacks and exploits this month, which now number at least 22, according to DeFiLlama. The Secret Network was one of the largest, behind the Humanity Protocol and Syscoin Bridge, which lost $32 million and $8 million, respectively, earlier this month.
The Secret Network is a privacy-focused, layer-1 blockchain built on the Cosmos ecosystem, and Axelar is a decentralized interoperability network that connects different blockchain ecosystems.
The Axelar-wrapped assets minted without backing in the exploit included saUSDT, saUSDC, saDAI, saWETH, saWBTC, saWBNB and sawstETH.
Related: Aztec Connect’s abandoned smart contract exploited for $2.1M
The attacker moved the exploited assets to the Ethereum blockchain and converted them to Ether (ETH). They then split the haul between around 30 wallets, eventually depositing the funds into exchanges including KuCoin, ChangeNow, and HitBTC, according to Common Prefix.
“If you hold Axelar-bridged saXXX tokens on Secret, please be aware their backing was affected, and your funds may be lost,” the Secret Network said on Saturday.
The Secret Network’s token, Secret (SCRT), was not impacted by the incident, but it remains down 99% from its 2021 all-time high, currently trading at $0.058. Axelar’s native token, Axelar (AXL), is in a similar state, trading at $0.045, down 98% from its 2024 peak.
Axelar posted a confirmation on Saturday following “some confusion” around the incident.
“Neither Axelar nor IBC [Inter-Blockchain Communication] was compromised. The exploited token smart contract was not developed, deployed, or maintained by Axelar. Axelar’s firewalling prevented the impact from spreading to other chains,” it said.
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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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1. Technology stocks fell sharply as investor interest shifted toward energy and selected defensive assets. From October 10 to 16, the Nasdaq 100 declined 5.49% and the S&P 500 fell 1.95%, while the Dow gained 0.67% and WTI crude rose 10.41%. BTC, ETH, and SOL declined 1.27%, 2.65%, and 4.44%, respectively. This week's technology earnings will be an important test of whether revenue growth, margins, and cash flow can justify current valuations. Better-than-expected results could help stabilize markets in the near term. 2. Crypto continues to see pockets of strong activity, but a broad-based altcoin season has yet to materialize. CoinMarketCap's (CMC) Altcoin Season Index stood at 54 as of the October 18 UTC daily observation, below the altcoin-season threshold of 75, while BTC dominance rose to 60.08%. Our proxy leverage ratio fluctuated between 4.00 and 4.07 during the week, showing no sustained increase and suggesting limited appetite for additional leverage. Meanwhile, as major exchanges expand access to traditional financial assets, the recent sell-off in AI-related equities could attract short-term speculative capital away from crypto. Such capital rotation could make it more difficult for a new altcoin season to take hold. 3. Papertrade's loss-to-mine model has generated significant interest across the crypto community. The protocol combines high-leverage derivatives trading with zero slippage and a mechanism that rewards trading losses with PAPER tokens. Across the eight complete UTC days from October 10 to 17, cumulative reported revenue reached approximately $56.08 million, including $51.90 million distributed to token holders. With growing participation from key opinion leaders (KOLs), Papertrade has reportedly ranked among the top three platforms by profitability in the broader market recently. Assets to watch: BTC, ETH, SOL, ARB, OP, SKHYNIX, SKHY, META, TSLA, LRCX, and SPCX. Key research priorities this week: Cash flow performance in technology earnings; the relative discount and holding costs of the two SK Hynix contracts; and U.S. initial jobless claims and PMI data. Weekly market data cover the period through October 16, while research information was verified through October 18. Observation periods are specified separately for each chart.
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