Avalanche-based Social Protocol Stars Arena Recovers 90% of Funds Lost in Security Exploit
Stars Arena, a social protocol built on the Avalanche blockchain, has successfully recovered approximately 90% of the funds that were lost during a security exploit last week. The team was able to negotiate with the individual responsible for the attack, resulting in the return of a significant portion of the stolen funds.
The Security Breach and Loss of Funds
Last week, Stars Arena experienced a major exploit that resulted in the loss of funds locked in its smart contract. PeckShield, a security analysis firm, estimated that around 266,104 AVAX coins (worth $2.9 million at the time) were taken. This caused the value locked within the app to drop to zero.
The breach was attributed to a reentrancy issue, which allowed attackers to sell platform tickets at inflated prices. In response to this incident, Stars Arena issued a warning to its users, advising them not to deposit any additional funds into the platform.
Agreement with the Hacker
Stars Arena announced that they reached an agreement with the hacker responsible for the exploit. Under this agreement, the hacker agreed to return approximately 90% of the stolen funds in exchange for a 10% bounty. So far, the hacker has returned 239,493 AVAX across two separate transactions. In recognition of their cooperation, the hacker received a bounty of 27,610 AVAX (currently valued at $250,000), according to a tweet by Stars Arena.
About Stars Arena
Stars Arena is a social protocol that operates as a forked iteration of FriendTech. It allows users to purchase or sell influencer profile tokens, which grant access to individual chat rooms. The pricing of these tokens follows a bonding curve, meaning their prices increase as demand rises. Transaction fees on the platform are relatively high, with a 10% fee applied to each token sale. Half of this fee goes to the project team as revenue, while the other half is distributed to users whose tokens are traded.
Hot Take: Stars Arena Recovers Majority of Funds Lost in Security Breach
The recovery of approximately 90% of the stolen funds by Stars Arena is a significant achievement following the recent security exploit. Through negotiation and cooperation with the hacker responsible, the team was able to reclaim a substantial amount of the funds, providing reassurance to its user base. This incident highlights the importance of robust security measures within decentralized protocols and serves as a reminder for users to exercise caution when interacting with smart contracts. Stars Arena’s proactive response in reaching an agreement with the hacker demonstrates their commitment to resolving such issues swiftly and protecting user assets.
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