Article source: Chain Source Technology PandaLY
Technical analysis of Hyperliquid's hotspot events from the perspective of blockchain security
The main reason Hyperliquid is widely discussed in the community today is its potential security risks in the bridge contract — $2.3 billion in USDC assets depend on a 3 out of 4 multi-signature mechanism for protection, while several known North Korean hacker addresses have recently been active in its platform's transaction records. This has led to some panic selling in the community, with a maximum drop of over 25% on the day of the hype, a market cap evaporation of over $7 billion, and an outflow of over $150 million in on-chain ecosystem funds.
This conflict on a technical and ecological level is very representative of current DeFi security.
The following will conduct an in-depth analysis from three aspects: risks of the validator mechanism, North Korean hacker behavior patterns, and potential mitigation measures.
1. Core issues of the validator mechanism: Overly centralized design and potential attack scenarios
Currently, there are only 4 validators for Hyperliquid's bridge contract, which represents an extremely centralized multi-signature architecture in DeFi projects. $2.3 billion in USDC assets rely on the rule of 3 out of 4 validators' agreement, exposing two obvious risks:
(1) Validator being compromised
Attack result: Once hackers control 3 validators, they can sign malicious transactions and transfer $2.3 billion USDC to the attacker's address. This risk is extremely severe and can hardly be intercepted by conventional means such as firewalls. Unless the transactions of assets crossing from Arbitrum are rolled back, this would lose all meaning of decentralization.
Technical intrusion paths: North Korean hacker teams possess top-tier attack capabilities in the crypto industry, and their classic intrusion paths include:
Social engineering attacks: Phishing emails with malicious links disguised as partners or trusted entities, implanting a RAT (Remote Access Trojan).
Supply chain attacks: If the validator's device relies on unsigned binaries or third-party components, hackers can gain control by implanting malicious update packages.
Zero-day vulnerability attacks: Utilize zero-day vulnerabilities in Chrome or other commonly used software to execute malicious code directly on the validator's device.
(2) Issues of validator credibility and distribution
Currently, Hyperliquid's validator architecture seems to have the following weaknesses:
Is the code running on the validators completely consistent? Is there a decentralized construction and operating environment?
Is there physical concentration among validators? If validator nodes in the same area are physically attacked or disconnected from the network, attackers may find it easier to target the remaining nodes.
Is the security of validators' personal devices managed uniformly by the organization? If validators use personal devices to access critical systems without deploying security monitoring measures such as EDR (Endpoint Detection and Response), it will further amplify the attack surface.
2. North Korean hacker attack methods: From traces to potential threats
The hacker behavior patterns disclosed by overseas famous blogger Tay are highly alarming, and the underlying logic suggests a systematic attack strategy:
(1) Why do hackers choose Hyperliquid?
High-value targets: $2.3 billion in USDC is enough to attract any top hacker team, and assets of this scale possess sufficient motivation for attack.
Weak validator mechanism: Only 3 validators need to be compromised to control all assets, making this low-threshold attack path highly attractive.
Transaction activities as testing means: Hackers may execute transactions to test the stability of the system, possibly to collect behavioral patterns of the Hyperliquid system, such as transaction processing delays, anomaly detection mechanisms, etc., providing data support for the next attack.
(2) Expected attack paths
Hackers are likely to take the following steps:
Collect identity information and social activities of validators, and send targeted phishing emails or messages.
Implant a RAT on the validator's device to gain control of the device through remote access.
Analyze Hyperliquid's trading logic and submit fund withdrawal requests with forged transaction signatures.
Finally execute the fund transfer, sending USDC to multiple chain mixing services for laundering.
(3) Expansion of attack targets
Although Hyperliquid's assets have not been stolen so far, the active trading traces of hackers indicate that they are conducting 'lurking' or 'probe attacks'. The community should not ignore these warnings, as they often represent an important preparatory stage for hacker teams before executing attacks.
3. Currently feasible mitigation measures: How to prevent attacks from occurring?
To address this risk, Hyperliquid needs to implement the following improvements as soon as possible:
(1) Decentralization of the validator architecture
Increase the number of validators: Increase from the current 4 validators to 15-20, which can significantly increase the difficulty for hackers to compromise most validators simultaneously.
Adopt a distributed operating environment: Ensure that validator nodes are distributed across multiple regions worldwide and that physical and network environments are isolated from each other.
Introduce different code implementations: To avoid single points of failure, the running code of validators can adopt different implementations (e.g., dual versions of Rust and Go).
(2) Enhance the security of validators' devices
Dedicated device management: All critical operations of validators must be completed on dedicated devices managed by Hyperliquid, and a complete EDR system should be deployed for monitoring.
Disable unsigned binaries: All files running on the validator's device must undergo unified signature verification by Hyperliquid to prevent supply chain attacks.
Regular security training: Educate and train validators on social engineering attacks to enhance their ability to identify phishing emails and malicious links.
(3) Protection mechanisms at the bridge contract level
Delay transaction mechanism: Set a delay execution mechanism for large fund withdrawals (e.g., over $10 million), providing response time for the community and the team.
Dynamic validation thresholds: Adjust the number of validators required based on the withdrawal amount, such as requiring 90% of validators' signatures for amounts exceeding a certain threshold.
(4) Improve attack detection and response capabilities
Blacklist mechanism: Collaborate with Circle to directly reject transaction requests marked as malicious addresses.
On-chain activity monitoring: Real-time monitoring of all abnormal activities on Hyperliquid, such as sudden increases in large transaction frequency, unusual validator signing behavior, etc.
Summary
The issues exposed by Hyperliquid today are not isolated incidents, but represent a systemic risk that is common in the current DeFi ecosystem: the level of attention to the validator mechanism and off-chain security is far lower than that at the contract level.
So far, no actual attacks have occurred, but this incident is a strong warning. Hyperliquid not only needs to quickly strengthen the decentralization and security of validators at the technical level but also needs to promote comprehensive discussions and improvements within the community regarding the risks of bridge contracts. Otherwise, these potential hazards may be genuinely exploited in the future, leading to irreversible losses.
