Taiko Confirms Verification Breach, Urges Bridge Withdrawals

Taiko, the Ethereum layer-2 scaling project, told users on Sunday to pull funds from its bridges immediately. The team confirmed that its chain state verification mechanism had been compromised, breaking the security assumptions that all Taiko bridges rely on.

The breach was disclosed in a post on Taiko’s official X account on June 21. Blockaid, a security firm, earlier reported that an Ethereum-based Taiko ERC20 Vault had been hit, with losses exceeding $1 million. Preliminary analysis points to a flaw in the source-indicator proof verification mechanism used by the Taiko bridge – the same system that ensures cross-chain transactions are valid.

“The security assumptions underpinning all bridges currently deployed on the Taiko network can no longer be trusted,” the project said.

Taiko also asked centralized exchanges to suspend deposits from the network until further notice. The move is a precaution to prevent further losses while the team investigates the exact cause and the full extent of the damage.

The incident highlights a persistent risk in the layer-2 ecosystem: bridge security. Taiko’s mechanism relies on cryptographic proofs to verify state changes between Ethereum and its own chain. When that proof system is compromised, attackers can trick the bridge into releasing funds without a legitimate deposit on the other side.

Taiko has not yet published a post-mortem or estimated a timeline for restoring the bridge. Users with funds still stuck on the network should monitor the project’s official channels for updates on recovery steps and possible re-deployment of the verification logic. The ETH price, which is the base asset for many Taiko transactions, may see mild selling pressure if the incident shakes confidence in similar layer-2 rollups.