The Optimism Foundation has issued a statement confirming that 20M OP tokens meant for a liquidity provisioning partner have been sent to the wrong address. The price of the OP token dropped from $1.12 on June 8 to just $0.70 after the news broke. The statement read,
“The Optimism Foundation engaged Wintermute for liquidity provisioning services … a temporary grant of 20 million OP tokens was allocated to Wintermute from the Foundation’s Partner Fund.
Wintermute provided an address to receive the borrowed tokens. The Optimism Foundation sent two separate test transactions, and upon Wintermute’s confirmation for each, sent the rest. Unfortunately, Wintermute later discovered they could not access these tokens because they had provided an address for an Ethereum (L1) multisig that they had not yet deployed to Optimism (L2).”
The very partner hired to help facilitate liquidity services was not using the product Optimism had hired them to support. Although Wintermute claims to be a “leading global algorithmic market maker in digital assets”, it has made what can be considered a fundamental mistake in crypto, especially for an algorithmic market maker.
In recompense, Wintermute has:
“committed to buying back the tokens lost. They will monitor the address that holds these lost tokens and buy as the address sells.”
Recovery process
Optimism stated that Wintermute had attempted to resolve the situation without the need to repurchase the tokens as they “began a recovery operation with the goal to deploy the L1 multisig contract to the same address on L2.” However, Optimism claims:
“an attacker was able to deploy the multisig to L2 with different initialization parameters before these efforts were completed, assuming ownership of the 20m OP.”
With that mistake, Wintermute essentially left 20 million OP tokens out on the street for anyone to pick up by deploying an Optimism L2…
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