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FollowingMidnight, the bridge connecting Cardano's ecosystem and privacy blockchain, was attacked, and approximately 515 million NIGHT tokens in the treasury were looted.
Within hours after the attack was detected, NIGHT tokens fell more than 30% within the day to approximately US$0.016, setting a record low. At current prices, the stolen tokens are worth approximately $9 million.
The security monitoring platform initially detected an abnormal outflow of funds from the Wchain Cardano Bridge and pointed out that the attacker was likely exploiting a specific validator design flaw.
How theattack works
Preliminary analysis shows that the root cause is the presence of non-monojective signature message encoding within the TreasuryCheck verifier. This encoding can lead to signature reuse attacks, where a valid signature from one transaction is reused to authorize another unauthorized transfer. In bridge architectures that rely on verifier signatures to confirm cross-chain withdrawals, any slight mistake in message construction is enough to completely undermine the trust model.
The attack emptied the bridge's treasury rather than individual user wallets. However, the indirect impact quickly became apparent: NIGHT holders faced immediate dilution and large selling. As tokens fell to unprecedented levels, liquidity on both decentralized and centralized exchanges was significantly reduced.
NIGHT hits record low and its impact
NIGHT is a native token for Midnight, a privacy blockchain incubated by Input Output (IO), the company behind Cardano. The project is positioned as a confidential computing sidechain that uses zero-knowledge proof to protect user data. Bridge infrastructure is critical to moving assets between Cardano and Midnight, so this attack strikes a core part of interoperability design. The collapse of tokens highlights how fragile liquidity can become when bridges, often the main entry and exit routes for assets in smaller ecosystems, are breached.
Traders who participated in early Midnight deployments now hold positions that have lost one-third of their market value in a day. Although the $9 million stolen may not seem significant compared to the nine-figure bridge attacks in previous rounds of cycles, the damage to confidence may ultimately cost the project more.
Cardano's expanding deck risks
The timing of this incident is unfavorable for the entire Cardano ecosystem. Although developer activity on the network remains among the most active in the industry, the bridging layer remains an unresolved security attack surface. Bridges remain the most attacked infrastructure among cryptocurrencies, and the Cardano ecosystem has also inherited this risk as the number of sidechains and connected networks increases.
With the expansion of real-world asset tokenization, cross-chain security has become a more urgent issue. The latest data shows that the value of RWA (real-world assets) on the chain has exceeded $20 billion, a milestone that means bridges are no longer just transferring speculative tokens-they are transferring tokenized stocks, bonds and credit. If a signature reuse vulnerability develops in bridges involving such assets, the consequences will be much more serious.
Currently, the focus is on the Wanchain team and Midnight developers, who need to clarify whether funds can be frozen or recovered and how to patch the validator code. At the same time, the market has reassessed the risks. NIGHT's recovery prospects depend on a transparent review report and convincing technical repair solutions. Until then, the token is likely to be traded under the shadow of uncertainty.
