Taiko Ethereum bridge reopens after $1.7M hack, complete 1:1 compensation
Taiko has reopened its Ethereum bridge after a June 21 exploit that was estimated to cause up to $1.7M in losses. The Taiko Ethereum bridge is now operating again with 1:1 asset backing, and Taiko says all affected users have been made whole.
The attack targeted the chain-state verification mechanism. The attacker injected fraudulent proofs, which enabled unauthorized withdrawals from Taiko’s Ethereum vault. Taiko suspended bridge operations for 11 days and completed a four-stage recovery plan: security patches, final chain-state review, and upgrades vetted first by Taiko’s Security Council and then by independent security experts.
Even with the Taiko Ethereum bridge reopened, temporary withdrawal limits remain in place as a precaution, but Taiko did not disclose specific thresholds. Market reaction was volatile: the TAIKO token briefly rose to around $0.35, then fell back to about $0.14. Taiko also plans to publish a full technical postmortem soon.
Separately, PeckShield reported that major security breaches in June led to an estimated $75.87M in losses across 40 significant incidents.
Neutral
The Taiko Ethereum bridge reopening and stated 1:1 compensation reduce downside tail risk for users, which can support sentiment and liquidity around TAIKO. However, an active breach history still raises risk premiums: temporary withdrawal limits remain, and the market already showed sharp swings (around $0.35 back to $0.14). Traders may treat this as a partial confidence rebuild rather than a full “risk-off clears” event. In the short term, volatility around follow-up disclosures (the planned technical postmortem) can keep TAIKO choppy. In the long term, if independent reviews and the postmortem validate the fixes, the event could shift from negative to constructive. Overall, the net effect on TAIKO price is likely neutral due to compensations balanced against lingering execution and trust risk.