Taiko reopened its Ethereum bridge after $1.7 million security breach and full user compensation

Ethereum Layer 2 network Taiko has resumed its bridge service following a recent security breach. The project team announced that asset transfers between the Ethereum and Taiko networks are once again operational, marking the completion of their post-attack recovery process.

Bridge operations back online

Taiko reported that all users impacted by the attack have been fully compensated. The team emphasized that the bridge is now functioning with a complete 1:1 asset backing, ensuring every token on the Taiko network is matched by an equivalent locked asset on Ethereum.

As a Layer 2 scaling network on Ethereum, Taiko aims to provide faster and cheaper transactions. With the reopening of the bridge, the project confirmed that the network is fully operational once again.

Mini Glossary: 1:1 asset backing means that every token on a network is supported by an equivalent asset locked on another chain. This balance is fundamental for the security of cross-chain bridges, allowing users to transfer assets safely.

Details of the June attack

The security incident took place on June 21, when the attacker compromised the mechanism that verifies the chain’s state, managing to inject fraudulent proofs into the system. As the protocol accepted these false proofs as valid, unauthorized withdrawals were made from Ethereum’s bridge vault.

Blockchain security firms estimated that up to $1.7 million worth of crypto assets were stolen in the attack. Following the breach, the Taiko team halted bridge operations and redirected efforts toward restoring network security.

Recovery plan executed in four phases

Earlier, Taiko had published a four-phase recovery strategy to bring the network back online safely. The team confirmed that every stage of the plan has now been completed. Security patches have been implemented, the chain’s final state has been examined, and the upgrades have been reviewed first by the Security Council, then by independent security experts.

Although the bridge has been reopened, temporary withdrawal limits will remain in place as an additional precaution. Taiko stated these limits have been set conservatively and are not expected to disrupt normal usage. However, specific thresholds have not yet been disclosed.

Market reaction and industry impact

Following the announcement that the bridge was operational again, Taiko’s native token TAIKO briefly surged to $0.35 before retreating to around $0.14. The project team also revealed plans to publish a detailed technical review in the coming days, covering the attack, the recovery process, and additional safeguards introduced to prevent future incidents.

Separately, blockchain security firm PeckShield reported that crypto projects collectively lost $75.87 million to major security breaches in June, with 40 significant incidents identified over the month.

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