Shido Blockchain Exploited: Billions of Tokens Lost
The Shido blockchain, a layer-1 proof-of-stake project, has experienced a devastating exploit resulting in the loss of billions of its native token, Shido. Within just 30 minutes, the value of the Shido token plummeted by 94%. This incident has raised concerns about the security and vulnerability of blockchain projects.
Over 4.3 Billion Tokens Stolen in the Attack
According to reports from blockchain security firm PeckShield, the exploit led to the loss of over 4.3 billion Shido tokens, which accounted for nearly half of its circulating supply. Before the attack, these tokens had a value of approximately $35 million.
The attack was brought to light by PeckShield, who detailed how an attacker gained control of Shido’s Ethereum staking contract. The exploiter then transferred the contract to another address and upgraded it with a hidden function that allowed for the withdrawal of staked tokens.
Shido is an Ethereum-based ERC-20 token that offers investors the opportunity to stake their coins on the project’s decentralized exchange (DEX) and earn an 8% annual yield. The project had been preparing for its mainnet launch but was hit by this exploit just before the announcement.
In the aftermath of the attack, Shido’s token price has slightly recovered but is still down by 74.6% within the last 24 hours.
Funding Trail Reveals Multiple Bridges Used
An on-chain investigator named ZachXBT revealed that the attacker’s address was initially funded with crypto from Layerswap, a cross-chain protocol, and then from the Arbitrum blockchain. It seems that both Layerswap and the individual responsible for funding the exploiter may have also fallen victim to hacking, as their assets were swiftly transferred before being used in the attack.
Another user named “Wazz” highlighted the funding mechanism used in the exploit, stating that the attacker utilized multiple bridges. However, efforts to track the stolen funds have been unsuccessful, and caution is advised against purchasing Shido tokens while the attacker retains control of a significant portion of them.
Hot Take: Lessons Learned from Shido’s Exploit
The Shido blockchain exploit serves as a reminder of the risks associated with investing in and participating in blockchain projects. Here are some key takeaways from this incident:
- Security Vulnerabilities: The exploit highlights the importance of robust security measures and thorough audits for blockchain projects. It is crucial for developers to identify and address potential vulnerabilities before they can be exploited.
- User Caution: Investors and users should exercise caution when participating in new or unproven projects. Thoroughly researching the project team, their track record, and security measures can help mitigate risks.
- Centralization Risks: The exploit also raises concerns about centralization risks in blockchain projects. In this case, the attacker was able to gain control over a significant portion of Shido tokens, causing a drastic price collapse. Projects should aim for decentralized governance and distribution of tokens to avoid such vulnerabilities.
While this incident is undoubtedly unfortunate for Shido and its token holders, it serves as a valuable lesson for the broader crypto community. By learning from these exploits and taking proactive measures to improve security, we can create a more robust and secure ecosystem for all participants.
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