Briefing
The cross-chain DeFi protocol Garden Finance was subjected to a sophisticated multi-chain exploit, resulting in the unauthorized draining of liquidity pools across Arbitrum, Ethereum, and Solana. This incident immediately exposed the critical security risk inherent in centralized third-party dependencies, specifically a compromised Web2 solver infrastructure that bridged the protocol’s on-chain security perimeter. The total financial loss from the breach is estimated at $10.8 million, with the attacker subsequently laundering a majority of the stolen assets through a privacy mixer.
Context
Prior to the exploit, the protocol’s security posture was already under scrutiny due to its alleged high volume of illicit fund flows, which highlighted a systemic failure in compliance and risk monitoring. The reliance on a single, centralized third-party ‘solver’ for complex cross-chain operations created an unacknowledged single point of failure that bypassed the protocol’s core smart contract security. This architectural design elevated the attack surface from a purely on-chain smart contract risk to a more vulnerable Web2 infrastructure risk.
Analysis
The attack vector leveraged a compromise of the third-party solver’s API or private key, which manages off-chain transaction signing for multi-chain operations. By gaining unauthorized access to this centralized component, the threat actor could effectively impersonate the legitimate solver, authorizing and executing withdrawal transactions across multiple interconnected chains. This bypasses the on-chain smart contract logic checks by exploiting a trusted, off-chain administrative function, allowing the attacker to systematically drain WBTC, USDC, and USDT from the protocol’s liquidity pools. The multi-chain scope of the breach confirms the compromise affected a core cross-chain component.
Parameters
- Total Loss Estimate ∞ $10.8 million. (Initial loss estimate before final forensic analysis.)
- Stolen Assets Laundered ∞ $6.65 million. (Amount transferred to Tornado Cash privacy mixer.)
- Attack Vector ∞ Third-Party Solver Compromise. (Vulnerability in centralized Web2 infrastructure.)
- Chains Affected ∞ Arbitrum, Ethereum, Solana. (Multi-chain scope of the exploit.)
Outlook
The immediate mitigation step for similar protocols is the rapid decentralization and redundancy of all off-chain administrative and solver functions to eliminate single points of failure. The incident carries a high contagion risk for other multi-chain protocols that rely on similar centralized bridge or solver infrastructure, demanding an immediate security review of all Web2/Web3 interfaces. This event will likely establish a new security best practice requiring external audits to rigorously vet the security of all third-party dependencies, especially those with privileged access to on-chain asset movements.
Verdict
The exploit of the centralized solver infrastructure confirms that the greatest systemic risk to multi-chain DeFi is the operational security failure of its off-chain, trusted components.
