A groundbreaking discovery has revealed that a single crypto wallet with multisignature permissions has control over 12 different blockchain networks. This means that if this wallet were ever compromised, it could potentially drain all 12 networks of their funds, resulting in a staggering $121 million in losses. The networks in question, including Zora, Aevo, Hypr, Orderly, Ancient8, Lyra, Mode, Pgn, Parallel, and Metal, were all created using the Conduit rollup creation software.
However, the wallet’s ability to transact is limited by the requirement of three out of five signatures from the team, as explained by Conduit founder Andrew Huang. The private keys for these signatures are stored on hardware wallets, making it virtually impossible to compromise the wallet without physically compromising three out of five individuals.
Nevertheless, Huang has announced plans to upgrade the system to a five out of seven multisig in the coming weeks, further reducing the risk of centralization. He also stated that decentralization will be enhanced once layer 2s move to “stage 2” of Vitalik Buterin’s decentralization plan.
Data shows that multiple Conduit-based networks utilize the same wallet to handle various tasks like network upgrades. L2Beat’s Aevo data confirms that its account has “unlimited upgrade power” and the potential to gain access to all funds. Aevo currently has over $72 million in total value locked (TVL).
The Conduit network Lyra also shares the same wallet, known as “ConduitMultisig,” with the ability to potentially access all funds. Lyra currently has over $20 million TVL.
Similar statements can be found for other Conduit networks, including Zora, Hpyr, Orderly, Ancient8, Mode, Pgn, Parallel, and Metal. It is alarming to note that all these blockchains have a combined TVL of approximately $121 million, all controlled by a single multisignature wallet.
While layer 2 networks have significantly reduced gas fees for Ethereum users, critics argue that they are too centralized and do not offer a satisfactory user experience for widespread crypto adoption. However, layer 2 developers believe that as these blockchains progress through Vitalik Buterin’s decentralization plan, they will become more decentralized.
In other news, a recent analysis has revealed the favorite exploit of the Lazarus Group, providing insight into their crypto hacking activities.