Aztec's Privacy-Focused Layer-2 Chain Hit by $2M Hack Amid Restructuring

Aztec, Ethereum's privacy-focused Layer-2 chain, has been hit by a $2 million hack, its second in two days. The firm stressed that the affected contracts are 'immutable' and were 'deprecated' in 2023.

The Aztec Foundation stated that neither exploit had any connection to the current network or the AZTEC ERC-20 token, emphasizing that the affected contracts belonged to legacy infrastructure that remained live on Ethereum after the products were sunset.

Despite these incidents, the team has been building, and in mid-July, Aztec released Alpha V5 - a major protocol upgrade introducing faster and cheaper private transactions. Alpha V5 reduces private-transaction proving times by more than 2x compared to the previous version, lowers the cost of a fully private transaction by roughly 50%, resolves critical issues found in V4, and sees the first wave of apps go live.

Aztec claims that the foundation is well capitalized 'for many years of operation at this size.' However, some speculate that the significant restructuring - which saw an 18-person layoff representing roughly 55% of the workforce - suggests that the bear market is taking a heavy toll on the company.