The funds from the Wormhole hack, which was the largest inter-blockchain bridge loss of $325 million, have been linked to a leveraged bet on LidoDAO’s staked ETH (stETH).
The thief used a series of looping transactions with LidoDAO’s stETH and MakerDAO’s DAI to become the world’s fifth-largest stETH holder.
Chainalysis detected the first movements of the stolen Wormhole Ether on January 30, 2023. The stolen funds were converted into stETH and used as collateral to borrow DAI, which was used to buy more stETH in a repeating process.
The upgraded Ethereum’s Beacon Chain will allow withdrawals, and LidoDAO plans to allow redemption of stETH for ETH.
