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Shido Token Plummets by 94% Following Exploit on Ethereum-Based Staking Contract

The token representing the layer-1 blockchain Shido plummeted by as much as 94% in a mere 30 minutes subsequent to falling victim to an exploit on its Ethereum-based staking contract.

Blockchain security firm PeckShield alerted its audience to the plunge in a post dated Feb. 29 X.

In a subsequent post, it elucidated that an exploiter had succeeded in transferring the blockchain’s Ethereum staking contract to another address, following which the new owner upgraded the contract with a concealed function to withdraw staked tokens.

According to CoinGecko data, PeckShield disclosed that the attacker had withdrawn over 4.3 billion Shido tokens, equating to nearly half of the circulating token supply, which was approximately 9 billion tokens.

Before the price downturn, the value of these tokens stood at approximately $35 million.

In another post, the pseudonymous on-chain researcher ZachXBT revealed that they had identified the exploiter’s address, which had been funded through cryptocurrency initially bridged from the cross-chain protocol Layerswap and subsequently from the Arbitrum blockchain.

ZachXBT claimed to have uncovered the true identity of the wallet owner who funded the exploiter but suggested that they too had fallen victim to hacking, as “their assets were suddenly transferred before funding the exploiter.”

Several hours after the incident commenced, the Shido team issued an official statement asserting that they had neutralised any further threats against Shido.

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The protocol also stated that they had initiated an investigation and urged the hacker to engage in negotiation regarding a bounty.

Shido also assured users who staked their tokens that their assets would be returned.

Shido, a layer-1 proof-of-stake blockchain that is yet to launch its mainnet, announced its impending mainnet launch in a post dated Feb. 24 X.

SHIDO, an Ethereum-based ERC-20 token, allowed staking on the project’s connected decentralized exchange (DEX) to earn an 8% annual yield, according to its website.

Shido did not provide an immediate response to a request for comment regarding the contract exploit.

According to PeckShield, last year witnessed over 600 crypto-related hacks resulting in $2.1 billion in losses, marking a nearly 30% decrease from 2022.

Up until January of this year, there had been 30 attacks resulting in $182.5 million lost.

February also seemed to conclude as a significant month for exploiters, with $290 million stolen from PlayDapp, alongside several million dollars’ worth of crypto stolen in various wallet breaches and phishing scams.

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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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