TAIKO hits all-time low as Taiko bridge exploit drains $1.7M

TAIKO, the native token of the Ethereum-based rollup Taiko, has lost 11% of its value in the last 24 hours, underperforming compared to the broader crypto market.

The bearish performance comes following an exploit of the protocol that resulted in a loss of $1.7 million (approx. AED 6.2 million).

The technical indicators are extremely bearish, suggesting further losses for TAIKO in the near term. 

Rollup protocol halts operations after security breach 

Ethereum-based rollup Taiko has confirmed a compromise affecting its chain state verification system, prompting urgent warnings for users and a partial shutdown of network operations.

In an announcement on X, the protocol said all bridges deployed on Taiko should no longer be considered secure and advised users to immediately withdraw funds. 

It also urged centralized exchanges to suspend deposits of its native token until further notice.

Taiko stated it is coordinating with its Security Council and ecosystem partners to contain the incident, pause affected systems where possible, and pursue technical and legal responses.

Following the discovery of the exploit, Taiko confirmed that proposers temporarily stopped producing new blocks while the team investigated the issue.

At around 2:08 a.m. ET, the team said the exploit had been contained and that withdrawals via the L1 Bridge and ERC20Vault had been fully stopped to prevent further losses.

According to Taiko’s investigation, the attack stemmed from a flaw in its bridge message-proof verification system.

The protocol explained that forged message proofs were incorrectly accepted on Ethereum Layer 1 without a valid corresponding event on the source chain. 

This allowed the attacker to register fake withdrawals and extract funds from the bridge and token vault.

An earlier analysis by on-chain security firm Blockaid pointed to the same vulnerability, describing it as a failure in source-signal proof validation. 

The firm noted that malicious message proofs were accepted as valid on Ethereum without matching “MessageSent” events on the Taiko chain, enabling unauthorized withdrawals.

Initial estimates from Blockaid placed losses at around $1 million (approx. AED 3.7 million). However, onchain analytics platform PeckShield later revised the figure to approximately $1.7 million (approx. AED 6.2 million).

PeckShield also reported that the attacker moved roughly 1.99 million Taiko tokens—worth about $169,702—into an address linked to the MEXC exchange.

Taiko has confirmed the $1.7 million (approx. AED 6.2 million) estimate and said it is preparing a full post-mortem report on the incident.

TAIKO could dip below $0.070 as the bearish trend persists

The TAIKO/USD 4-hour chart is bearish as the token lost 11% of its value over the past few hours.

Momentum indicators are extremely bearish, suggesting that buyers have relinquished control. The RSI of 32 means that TAIKO is approaching the oversold territory. 

The MACD lines are also within the negative zone, adding further confluence to the bearish narrative.

If the bearish trend persists, TAIKO could drop below the $0.070 level in the near term, creating a new all-time low in the process. 

A daily candle close below this level could see TAIKO extend its decline towards the $0.060 zone.

However, if the token bounces back, it could reclaim the efficiency level at $0.082 over the next few hours or days.

An extended rally would allow TAIKO to surge towards the Sunday high of $0.098.