Crosschain Protocol Axelar Network Loses $4.7 Million to Bridge Exploit

Key Insights

• Axelar Network loses $4.7 million to a bridge exploit
• Axelar maintains that its core protocol and other integrations were not impacted
• This continues a series of cross-chain bridge exploits that have plagued the crypto industry recently

Cross-chain interoperability protocol Axelar has confirmed a security breach that resulted in the loss of approximately $4.67 million in bridged assets linked to Secret Network.

According to Axelar, preliminary findings indicate that the exploit was limited to the Secret-side ICS-20 smart contract used within the Cosmos bridge connecting Secret Network and Axelar.

The protocol said there was no evidence that the vulnerability affected Axelar’s core network, validator set, or other integrations.

Axelar Cuts Secret Network Connections After Exploit

The protocol added that it immediately disabled all connections between the Axelar core protocol and Secret Network after discovering the exploit. This move seems calculated to prevent further losses.

Secret is an independent, privacy-focused blockchain with encrypted transaction data. Through its integration with Axelar, Secret can support use cases such as DeFi trading, governance, and other onchain activity, all while maintaining anonymity through private cross-chain communication.

Beyond shutting down bridge routes between the two networks, Axelar added that it has also reached out to relevant exchanges and law enforcement agencies over the stolen funds.

However, the protocol clarified that the exploit affected only this bridge and did not affect the Axelar core protocol. It noted that there are no signs that any other IBC connections, Secret tokens, or Axelar integration were impacted.

The incident has not had a major impact on Axelar’s AXL token, which is up almost 6% over the past seven days. AXL is currently trading around $0.045 even and has fallen almost 35% since 2026 started. It is down 98% from its peak price of $2.64.

Blockchain Bridges Remain Vulnerable

Meanwhile, the Axelar bridge exploit once again highlights the vulnerability of cross-chain bridges. While cross-chain interoperability has become crucial in the crypto industry, the vulnerability of the protocols continues to raise concerns.

Earlier this year, an exploit of the KelpDAO bridge powered by LayerZero resulted in the theft of  $292 million and a brief depeg of rsETH. It took the concerted efforts of the crypto community, through DeFi United, to restore rsETH and prevent contagion.

The incident also led several DeFi protocols to migrate to Chainlink’s Cross-Chain Interoperability Protocol (CCIP) to improve cross-chain security.

However, bridge exploits continue to happen, although with smaller losses. In May, hackers drained the Verus Protocol bridge on the Ethereum network, stealing over $11 million.

Cross-chain liquidity protocol Thorchain was also exploited for $10.8 million last month, while Gravity Bridge lost $5.4 million to a breach experts attribute to a signing key compromise.

Unsurprisingly, cross-chain bridges and protocols are one of the most exploited in DeFi. Chainanalysis noted that over $2.8 billion has been stolen from cross-chain bridges in such attacks since 2021.

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