Along with the increase in cryptocurrency trading, hackers have taken over the world of cryptocurrency as well, costing millions to investors.
It’s important to be careful in which crypto to invest in and maximize your profits. Every investor aims at making at least $100 a day in profit but with hackers and various scams in the market, deciding which one to invest in has become more and more difficult.
The latest hack in the crypo market took place on Sunday morning. Billions worth of malicious tokens was issued after exploiting a smart contract on the PolyNetwork bridge tool.
The Bridge tool is a feature on the PolyNetwork platform that allows the user to connect with different blockchains. This enables the user to trade cryptocurrency from different blockchains.
This tool was used to exploit the PolyNetwork platform by issuing various kinds of worthless tokens. They did so by tricking the system into issuing tokens, which in reality, does not exist.
The hacker managed to generate billions in Binance USD (BUSD) and BNB on the Metis blockchain, while also creating trillions in Shiba Inu (SHIB) on the Heco blockchain. They also minted millions of other tokens on various other networks, such as Avalanche and Polygon. This earned the hackers close to $42 billion in tokens.
However, the prevention features present on the PolyNetwork platform immediately averted the mishap. The lack of liquidity feature prevented the hackers from converting these tokens into cash. Metis developers confirmed that the no “sell liquidity available” option locked the BUSD and BNB in the PolyNetwork platform.
According to reports, the attackers found a way to liquidate illegally-issued 94 billion SHIB tokens for 360 ether (ETH), 495 million COOK for 16 ether, and 15 million RFuel for 27 ether. They transferred $1 ETH for the sale of trade.
This attack on Sunday was not the first time that a hacker illegally issued tokens. In August 2021, a hacker issued over 600 million tokens into the blockchain by exploiting the bridge tool. The bridge tool is used to trade various tokens from different blockchains but it has also been the primary target for hacks. The bridge tool is the most beneficial and also the most vulnerable feature due to its cross-chain trade.
Although preventive measures have been taken, it needs to be a key factor of concentration of the blockchain community. Also, the hackers use the same age-old tricks used over and over again.
The bridge tool is an important part of a system involving multiple blockchains, and the Total Value Locked (TVL) in different DeFi apps has risen sharply. By the end of March 2022, the total value locked in the industry was around $215 billion, which is 156% higher than what it was in March 2021.
This is the reason the Bridge tool is the subject of attacks. If the attacks continue, the potential risk of inflation will increase.
The Bridge tool is the best way to trade across multiple blockchains but without preventive measures, it could lead to inflation. Hence, preventive measures need to be a key focus for the blockchain community. However, it is possible to avoid scammers by paying attention to the proposal and carefully verifying its legitimacy before engaging with bad actors.
Disclaimer: This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
