The Shido token, which operates on the layer-1 blockchain, experienced a massive drop of up to 94% in just half an hour after falling victim to an exploit on its Ethereum-based staking contract. PeckShield, a blockchain security firm, alerted its followers about the incident in a post on February 29. The firm explained that the attacker was able to transfer the blockchain’s Ethereum staking contract to another address and then upgraded the contract with a hidden function to withdraw the staked tokens. According to CoinGecko data, the attacker managed to withdraw over 4.3 billion Shido tokens, which accounts for nearly half of the total circulating token supply of almost 9 billion tokens. Prior to the price drop, these tokens were valued at approximately $35 million.
In a separate post, an on-chain researcher named ZachXBT discovered that the address used by the exploiter was funded through cryptocurrency that was first bridged from the cross-chain protocol Layerswap and then from the Arbitrum blockchain. ZachXBT also claimed to have identified the real identity of the wallet owner who funded the exploiter but noted that this individual’s assets were also transferred before they could provide funding to the exploiter.
Shido is a layer-1 proof-of-stake blockchain that has not yet launched its mainnet. In a post on February 24, the project announced that it would be launching its mainnet the following week. The SHIDO token, which is an Ethereum-based ERC-20 token, can be staked on the project’s decentralized exchange (DEX) to earn an annual yield of 8%, according to the project’s 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 represents a nearly 30% decrease compared to the previous year. In January of this year alone, there were 30 attacks resulting in $182.5 million lost. February has also seen significant losses, with $290 million stolen from PlayDapp and several million dollars’ worth of cryptocurrency stolen in various wallet breaches and phishing scams.
Lawmakers in the United States are proposing crypto regulations due to their fear and uncertainty surrounding the industry.