Exchanges have frozen suspicious funds as Harmony works to contain the attack and upgrade network validators.
Harmony is assessing how to handle the newly minted ONE tokens
Photo Credit: Unsplash/Growtika
Harmony is planning to rollback on the blockchain due to allegations that a hacker has taken advantage of the blockchain system in minting nearly 4 billion ONE tokens, which is approximately 26 percent of the total token supply. According to Harmony, it is working with exchanges to halt the transactions. The layer-1 blockchain announced that they were working on a patch and exploring ways to perform a rollback of transactions. The price of the ONE token by Harmony dropped nearly 40 percent due to this incident, an amount equal to more than a quarter of the token's existing supply.
The company confirmed the attack and instructed Harmony network operators to install an emergency software update that was expected to put an end to any further minting. Moreover, the team has been addressing how to handle existing tokens. Additionally, the token bridge was stopped by the project, and funds related to four addresses were frozen by the exchanges.
“We are working on a patch and rollback options,” Harmony said, adding that it would provide another update when more information is available. Later, the company added, “We traced 10288 transfers across all 409 wallets where the fraudulently minted tokens have landed, and alerted exchange partners on hundreds of suspicious deposit transactions. They promptly blocked the hacker's wallets. As of now, 53 percent of our validators completed the upgrade for the emergency patch, which was released only 4 hours ago.”
Harmony is a blockchain network built on layer 1 for DeFi protocols and marketplaces. Its native coin, ONE, is used for transaction fees and to secure the chain. This project was one of the largest in terms of market cap in its prime, with a valuation of $4 billion (roughly Rs. 38,136 crore) in January 2022. There were around 15 billion ONE tokens issued before the exploit, indicating that an additional issuance of around 4 billion tokens equals an increment of 26 percent.
This is not the first time that Harmony has battled such an exploit. In 2022, a notorious North Korean hacking group known as the Lazarus Group was believed to be linked to the $100 million (roughly Rs. 953 crore) heist on Harmony protocol's Horizon bridge. The hacker stole several crypto coins and swapped them for Ethereum. The coins stolen were Wrapped Ethereum, Tether (USDT), and USD Coin (USDC) stablecoins.
Get your daily dose of tech news, reviews, and insights, in under 80 characters on Gadgets 360 Turbo. Connect with fellow tech lovers on our Forum. Follow us on X, Facebook, WhatsApp, Threads and Google News for instant updates. Catch all the action on our YouTube channel.