In just half an hour, the token for the layer-1 blockchain Shido plummeted by a staggering 94% following an exploit on its Ethereum-based staking contract.
PeckShield, a blockchain security firm, alerted its followers to this significant drop in a post on February 29th. In a subsequent post, PeckShield explained that the exploiter had successfully transferred the blockchain’s Ethereum staking contract to another address. The new owner then upgraded the contract with a hidden function that allowed them to withdraw the staked tokens.
According to CoinGecko data, the attacker managed to withdraw over 4.3 billion Shido tokens, which accounted for almost half of the circulating token supply of nearly 9 billion tokens. Prior to the price drop, these tokens were valued at approximately $35 million.
Pseudonymous on-chain researcher ZachXBT, in an X post, revealed that they had discovered the exploiter’s address was funded through cryptocurrency first bridged from the cross-chain protocol Layerswap, and then from the Arbitrum blockchain. Additionally, ZachXBT claimed to have identified the real identity of the wallet owner who funded the exploiter. However, they noted that this individual also appeared to have been hacked, as their assets were unexpectedly transferred before funding the exploiter.
Shido is a layer-1 proof-of-stake blockchain that has yet to launch its mainnet. In a post on February 24th, the project announced that it would be launching its mainnet the following week. The SHIDO token, an Ethereum-based ERC-20 token, could be staked on the project’s connected decentralized exchange (DEX) to earn an 8% annual yield, as stated on its website.
Shido has not yet responded to a request for comment regarding the contract exploit.
According to PeckShield, there were over 600 crypto-related hacks last year, resulting in $2.1 billion in losses. However, this marked a nearly 30% decrease from the previous year. In January of this year alone, there were 30 attacks, resulting in $182.5 million in losses. February has also seen significant losses due to exploitations, including $290 million stolen from PlayDapp, as well as several million dollars’ worth of cryptocurrency stolen through various wallet breaches and phishing scams.
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