🚨 Saga EVM Exploit – $7M Minted from Thin Air 🚨

Here’s a polished post summarizing the Saga incident from Rekt in a clear, shareable way for social media, blogs, or forums:

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🚨 Saga EVM Exploit – $7M Minted from Thin Air 🚨

On January 21, 2026, Saga’s inter-blockchain communication (IBC) bridge fell victim to a major exploit. An attacker used a helper contract to feed fake IBC messages to the precompile, tricking the protocol into minting $7M in Saga Dollar ($D) — without any collateral.

💥 What Happened:

• Fake IBC messages bypassed all validation.
• $D was minted “out of thin air” and redeemed for real yield-bearing assets: yETH, yUSD, tBTC.
• Assets were bridged to Ethereum, converted via DEXes, netting 2,000+ ETH (~$6M).
• An additional ~$800K was parked in Uniswap v4 LP positions under a fresh wallet.
• Saga’s emergency pause at block 6593800 came too late to prevent the damage.

📉 Impact:

• $D stablecoin depegged to $0.75.
• TVL dropped from $37M → $13.6M.
• Multiple Ethermint-based EVM chains now face vulnerability due to shared code.

⚠️ Key Takeaways:

1. Cross-chain bridges must validate messages, not just trust them.
2. Automation works, but blind trust = huge risk.
3. The exploit wasn’t “clever” — it abused assumptions baked into IBC logic.

💡 Ecosystem Lessons:

• Validators stayed honest, consensus wasn’t compromised.
• The root issue: IBC precompiles believed every message.
• Cosmos Labs confirms this affects multiple Ethermint-based chains.

Saga’s post-mortem will reveal full details once investigations complete. Meanwhile, the incident serves as a stark reminder: automation without verification is a security trap.

📌 References & Thanks:
Defimon, Blocksec Phalcon, Saga, CoinTelegraph, DefiLlama, Vladimir S., CertiK, GoPlusSecurity, Cosmos Labs, Coingecko, Debank