Bridging crypto does not literally move the same token from one blockchain to another.
In many bridge designs, the original asset is locked on the source chain, while a corresponding wrapped or bridged token is minted on the destination chain. That new token can maintain a 1:1 value only while the assets backing it remain secure.
Ethereum’s official bridge documentation warns that this structure introduces smart-contract, counterparty and systemic risks.
So what happens if the bridge gets hacked?
The Bridged Token Can Lose Its Backing
Imagine a bridge holds 10,000 ETH on Ethereum and has issued 10,000 wrapped ETH tokens on another blockchain.
Normally:
10,000 wrapped ETH = 10,000 ETH in bridge reserves
If an attacker drains 6,000 ETH from the bridge contract, however, 10,000 wrapped tokens still exist while only 4,000 ETH remain available to redeem them.
The wrapped asset is now undercollateralized.
Market participants may immediately start selling it below the price of native ETH because they no longer know whether each token can be redeemed one-for-one.
This is similar to a stablecoin depeg, except the missing collateral sits inside cross-chain infrastructure rather than a stablecoin reserve.
Hackers Can Also Create Tokens From Nothing
A bridge does not necessarily need to lose its locked reserves directly.
Some attacks exploit the minting mechanism instead.
If an attacker can convince the destination-chain contract that assets were deposited when they were not, the bridge may mint unbacked wrapped tokens. Chainlink describes this as an “infinite mint” problem: token supply increases without a matching increase in reserves.
The attacker can then sell those tokens on decentralized exchanges or use them as collateral elsewhere.
That makes bridge exploits especially dangerous because the damage can spread beyond people who used the bridge itself.
DeFi Protocols Can Take the Next Loss
Bridged assets are often deposited into lending protocols, liquidity pools and decentralized exchanges.
Suppose an unbacked wrapped asset is accepted as collateral for a $1 million loan. If the token suddenly collapses toward zero, the protocol may be left with worthless collateral while the borrower keeps the assets they borrowed.
This creates a path from a bridge exploit to DeFi insolvency.
It is one reason understanding DeFi liquidations matters: protocols may freeze markets, reduce collateral values or liquidate positions rapidly when confidence in an asset disappears.
Can the Bridged Token Recover?
Sometimes.
Bridge operators may replace stolen collateral, pause minting, recover funds or recapitalize the system. If full backing is restored, the wrapped token may return toward its original peg.
Other bridges use proof-of-reserve systems that monitor whether outstanding wrapped tokens remain fully collateralized. These can be connected to circuit breakers that stop new minting or freeze affected markets when reserves fall below required levels.
