in one Twitter AnnouncementHedera confirmed an exploit in its mainnet that led to a loss of liquidity tokens. However, the company found that the exploit had no impact on their consensus layer.
Network exploitation is among the challenges faced by many crypto projects, with DeFi protocols seeing the highest hack incidents since 2021. The latest exploit is that of Hedera, an open-source proof-of-stake decentralized public ledger.
Hedera announces details of the mainnet exploit
Hadera is the company behind the distributed ledger Hedera Hashgraph. In the latest hack, the attackers exploited their backbone’s smart contract service code and transferred service tokens from user accounts to their accounts.
The hackers targeted liquidity pool accounts on several decentralized exchanges (DEXs) that use Uniswap V2-derived contract codes, including Pangolin Hedera, SaucerSwap Labs, and HeliSwap DEX. The announcement explained that the criminals moved the stolen tokens to the Hshport Network Bridge. However, the bridge operators noticed the unusual activity and quickly took action to disable it.
Hedera further noted that it has worked with the community, including the HBAR Foundation, Swirlds Labs, Pangolin Hedera, Lime Chain HQ, SaucerSwap Labs, and HeliSwap DEX, to investigate the attack. The company also took measures to prevent hackers from stealing more tokens. On March 9, the network shut down mainnet proxies and restricted access to the network.
Hedera’s announcement also revealed that the team has identified the root cause of the attack and is working on a fix. If they find a fix, Council members will sign transactions to authorize a new code deployment to mainnet to fix the vulnerability.
The log noted that once the issue was resolved, the mainnet proxies would be activated, allowing normal activity on the network to resume.
Recent hacking incident dents Hedera Network’s milestone
While explaining the method used by the hackers and possible solutions to the problem, Hedera failed to disclose the number of tokens stolen by the hackers. As a Twitter user commentedThe blockchain appeared very secure, but the recent attack revealed the opposite.
The network before updated its network to convert Ethereum Virtual Machine (EVM) compatible smart contract code to the Hedera Token Service (HTS). This process partially involves decompiling the Ethereum contract bytecode to the HTS where the Hedera-based DEX SaucerSwap thinks the hack vector went out. However, the Twitter post did not confirm the source of the vulnerability.
HBAR price is showing a drop of over 3% on the l HBARUSDT chart on Tradingview.com
After turning off the network proxies, the Hedera team recommended that token holders check their account balances and EVM address on hashscan.io to ensure funds are intact.
Meanwhile the HBAR price is down 8.5% in the last 24 hours and is trading at $0.05721. The price decline is not only due to the recent attack, but also to the ongoing market-wide downturn.
However, the total value is locked on SaucerSwap dropped by 30% fell from $20.7 million to $14.58 million in the last 24 hours.
The drop in total locked value suggests that many token holders were quick to withdraw their funds after initial discussion of a possible hack exploit. The incident impacted recent blockchain development milestone after its mainnet reached 5 billion transactions.
Featured image from Pixabay and chart from Tradingview.com
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