Avalanche-Based Stars Arena Falls Victim To A $3 Million Exploit, TVL Tanks By 100%
07 Octubre 2023 - 8:00AM
NEWSBTC
Stars Arena, a decentralized social media platform built on the
Avalanche network, has suffered a major security breach, resulting
in the loss of a significant amount of cryptocurrency. This comes
barely a day after the decentralized application (dApp) reportedly
fixed a loophole in its smart contract. On Thursday, October 5, the
Stars Arena team said – via a post on X (formerly Twitter) – that
it has averted a security exploit, which could have led to the loss
of over $1 million worth of funds. Stars Arena Loses $2.9
Million To Attack, PeckShield Reveals On Saturday, October 7, a
pseudonymous X user raised the alarm about the suspicious movement
of Avalanche (AVAX) tokens from the Stars Arena contract. A
few minutes after this, the protocol’s team confirmed – via a post
on X – that there has been a “major security breach with its smart
contract.” Related Reading: Celsius Commits To Massive Crypto
Repayment: $2 Billion To Creditors By 2023’s End This exploit has
also been flagged by blockchain security firm PeckShield, who
disclosed that around $2.9 million in AVAX has been drained from
the decentralized social media application. An initial
breakdown by the security company identified a reentrancy issue on
the Stars Arena Shares contract. “The reentrancy is abused to
update the weight when the share/ticket is issued so that 1 share
can be sold at a much higher price of approximately 274,000 AVAX,”
PeckShield said. As earlier noted, Stars Arena has been gaining
some popularity in the past few days. In fact, the recent activity
uptick on the Avalanche network has been attributed to the rise of
the decentralized social application. However, this latest hack
represents a significant deterrent to Stars Arena’s growth.
According to data from DeFiLlama, the protocol’s total value locked
has plummeted from $1.26 million to $0.47 in the past day,
reflecting a 100% decline. Stars Arena went live on Avalanche
C-Chain – the blockchain component specifically designed for
running smart contracts on Avalanche – in late September. Although
the Friend.tech-like platform experienced some traction after
launch, recent security concerns seem to be stirring skepticism
around its growth. $900 Million Lost To Bad Actors In 2023 Q3 This
latest exploit will serve as an unfriendly reminder of the growing
security concerns in the crypto space. Particularly, the
cryptocurrency industry saw a significant surge in exploits and
security breaches in the third quarter of 2023. According to a
quarterly report by blockchain security firm Beosin, the losses
incurred only in Q3 2023 were larger than the total for the year’s
first half. A total of $889.26 million was lost to various attacks
in the last quarter, compared to the $663 million lost in 2023’s
first six months. Related Reading: Twitter IPO: Dogecoin Takes
Center Stage In Elon Musk’s X IPO Rumors Source: Beosin/X Beosin’s
report revealed that $540.1 million was lost to hacks, with
decentralized finance (DeFi) accounting for 18% of this value.
Notably, DeFi peer-to-peer service Mixin Network lost $200 million
due to a compromise in its cloud service provider database. AVAX
price facing resistance at $11 on the daily timeframe | Source:
AVAXUSDT chart on TradingView Featured image from Shutterstock,
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