ZetaChain Pauses Cross-Chain Transactions After Smart Contract Attack

Layer 1 network ZetaChain has paused cross-chain transactions on its mainnet after identifying an attack on its GatewayEVM contract, according to The Block. The incident impacted only internal ZetaChain team wallets, with no user funds affected, the team stated. According to DefiLlama data, $300,000 was lost in the attack, though ZetaChain did not disclose the amount and said it will release a detailed post-mortem.

Technical Background

A GatewayEVM contract is a smart contract that serves as a unified entry point for cross-chain interactions between external EVM-compatible chains and applications on ZetaChain.

Incident Response and Status

“As a precaution, cross-chain transactions are currently paused on ZetaChain,” the team said. “Investigation is still ongoing, and at this time no user funds were impacted by this attack.”

The team has mitigated the attack vector to prevent more funds from being compromised. According to ZetaChain’s official status page, cross-chain transactions remained paused as of 9:00 p.m. ET on Monday, nine hours after the attack was identified.

ZetaChain Overview

ZetaChain is an interoperability-focused Layer 1 network designed as the “first universal blockchain” that integrates different networks, including Bitcoin, Ethereum, and Polygon. Its mainnet went live in early 2024.

Broader Industry Context

The ZetaChain attack follows the recent exploit of Kelp DAO, a LayerZero-powered cross-chain bridge that drained $292 million from the protocol. This incident prompted the formation of an industry-wide coalition named “DeFi United” to rescue Aave, which sustained substantial bad debt from the Kelp DAO exploit. Since the Kelp DAO exploit, there have been at least 10 attacks on various DeFi projects, according to DefiLlama data.