ERC20 Tokens Compromised | 5 Octodecillion USD Hack
According to widely published reports, ERC20 tokens have been compromised. A major bug is said to be the cause of the problem. Many exchanges have already stopped deposits to safeguard customers funds. In the meantime, they wait for the bug to be fixed. It all started with the Smartmesh hack. Smartmesh is a Smart Contract on the Ethereum blockchain. Smartmesh uses the SMT token and connects different devices without using the internet. Today, someone found out the loophole in the contract and created tokens worth 5 Octodecillion USD. Let's look into this massive hack in detail. The vulnerability that made exchanges halt the trading of ERC20 tokens will also be covered.
SmartMesh Explained
Smartmesh is an Internet of Things system built on the Ethereum Network as an ERC20 token. It allows a user to connect their Smartphones to any other device without the use of the Internet. We can also call it a next generation internet protocol that creates a peer-to-peer mesh-like network that acts like a parallel internet. In simple words, it is a decentralized IoT protocol that connects everyone via smart devices without any internet access. Smartmesh can provide high communication speed and bandwidth which is also cost-free.
Internet free micropayments can be created using Smartmesh. It is the most energy-efficient wireless mesh. It is faster and more efficient than the traditional internet.
Smartmesh network fulfills the internet's original purpose of a decentralized network for everyone to connect to and share information. The Internet has now become more centralized. This problem as well as data breach issues can be solved with Smartmesh's technology.
SMT Token
Smartmesh uses SMT token to incentivize the users who share their smartphones to build a global internet. The SMT token will be used when sending data packets while relaying nodes earn more tokens. The mesh network can be integrated with any application and micropayments can be enabled in them. This mesh network is therefore very useful in areas with no internet or poor connection.
SMT token has been moving up in price. It has seen by 99% gains this week. The price of one token at the time of writing is $.11. The marketcap stands at $152 Million. Many major exchanges like HitBTC, Gate.io, and Huobi have listed this token.
SmartMesh Hacked
Someone transferred 65,133,050,195,990,400,000,000,000,000,000,000,000,000,000,000,000,000,000,000.891004451135422463
Smartmesh tokens worth ($5,712,591,867,014,630,000,000,000,000,000,000,000,000,000,000,000,000,000,000.00) to his address.
Don't worry. I didn't read those figures either. I am also yet to wrap my head around octodecillion. For now we can agree that is a very large amount. What happened was that the loophole in the SmartMesh contract allowed someone to create SMT tokens worth more than 5 Octodecillion USD. Some of those tokens were sold, but the hacker's accounts on centralized exchanges are now frozen. According to the Smartmesh team, the bug has since been fixed.
Let's hope that the SmarMesh team comes out of this incident and continues to create a decentralized parallel network that might one day compete with the Internet itself.
ERC20 Tokens Deposit Suspended by Major Exchanges
Following the incident, OKEx exchange announced that they had suspended all ERC - 20 token deposits. The announcement stated that attackers could generate a large number of tokens and deposit them in a normal address as a result of the vulnerability.HitBTC also announced that they were suspending their ERC20 deposits due to the bug.
"We've temporarily suspended ERC-20 token deposits and withdrawals while we review all smart contracts for exposure to the reported batchOverflow bug. We take any reports of vulnerabilities very seriously to ensure that customer funds remain safe. Thank you for your patience!"Poloneix exchange did same.
"We've temporarily suspended ERC-20 token deposits and withdrawals while we review all smart contracts for exposure to the reported batchOverflow bug. We take any reports of vulnerabilities very seriously to ensure that customer funds remain safe. Thank you for your patience!"We strongly believe that the above announcement has been made because of the smartmesh hack incident and the exchange wants to safeguard other erc-20 tokens. We will keep updating our readers about the trail of incidents following this hacking incident and whether the developers quickly fix the vulnerability to enable deposits again.
Posted from my blog with SteemPress : https://cryptocoremedia.com/erc20-bugs-hacks-cost-5-octodecillion/
Although this is unfortunate blow from a confidence standpoint, this is the kind of thing that needs to happen in order to improve the network. I have no doubt that the perpetrators will be be caught and smart contracts will be that much better in the future. The fact that it has taken them this long to find the loophole to begin with is a testament to the forethought of the programmers and now this has been found, I'm sure that there are a bunch of other potential loopholes that will be filled as well. Bad in the short run but good in the long run. Thanks for the post @cryptocoremedia!
Agreed. Faults have been exposed here, and it should serve as a valuable learning experience to the development community.
Not that I've been in the space for very long, but this strikes me as another class of hack compared to Coincheck etc. The latter category has relatively direct results in the real economy, whereas the results of this type are almost certainly impossible to apply in the real world. The analogy that comes to mind is symbolic logic vs. debate.