Shibarium, a Layer 2 network for Shiba Inu, got hit with a major hack, losing about $2.4 million. Let’s break down what happened.
The Hack: A Flash Loan-Style Attack
A hacker exploited a vulnerability in Shibarium’s bridge. Using funds from a previous bridge hack, they snagged 4.6 million BONE tokens (Shibarium’s governance token) in a single transaction, similar to a flash loan. This gave them enough power to mess with the network’s validators.
The hacker used 224.57 ETH ($1.05 million) and 92.6 billion SHIB ($1.30 million) – all stolen from the bridge – to pull this off. While the BONE tokens are locked up for now due to staking rules, the attack was still a serious breach.
Other tokens were also stolen:
- LEASH: $645,000
- ROAR: $284,000
- TREAT: $50,000
- BAD: $17,000
- SHIFU: $10,000
The hacker tried to sell around $700,000 worth of KNINE tokens, but the K9 Finance DAO blocked their address, freezing those tokens permanently.
The Fallout and Response
The Shibarium team immediately took action:
- Halted staking and unstaking: To prevent further losses.
- Secured funds: Moved stake manager funds to a more secure multisig wallet.
- Brought in experts: Blockchain security firms Hexens, Seal911, and PeckShield are investigating.
- Negotiation? The team is reportedly open to talking with the hacker, possibly offering a reward for the return of the stolen assets.
Ten out of twelve validators had their signing keys compromised. Only K9 Finance and Unification validators resisted the attack.
Market Impact and Aftermath
The hack caused a price drop for several Shibarium tokens:
- SHIB: Down slightly (1.67%).
- LEASH: Down 5.69%.
- BONE: Down a significant 21.98%.
The situation is still developing, but the hack highlights serious security concerns for Shibarium and the broader crypto space.