Understanding Infinite Mint Attack.

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Hello guys, welcome back to this space, I hope y'all are keeping well. It a beautiful morning over here, I do not know what time of the day it is over there, anyways Good day... smiles. So today I've got something interesting to share with you once again...by the way, hope you got value from my last post, I want to believe your response is "yes"...smiles.

Today we would be looking at the topic Infinite Mint Attack, it's quite an interesting one and of course the reason for sharing all of this is just to equip us with knowledge as to how this terrain works, kindly sit back and enjoy every bit of what I've got to share.

Introduction

Blockchain networks are designed to be very secured but it funny how that there can still be loopholes around it to be exploited by hacker. Several attacked have been launch over the years, many of which turned out to be successful and that because these hackers spotted some loopholes and exploited them.

Many smart contracts have also been victims of successful hacks in the past and that of course should be blamed on the developers who wrote it code before it was deployed. Some of these written code were not properly done and these gave these attacker the needed opportunity they crave to execute their plot.

What is Infinite Mint Attack

Infinite Mint attack is one carried out by a dubious hacker, where he mints an unbelievable ridiculous (infinite) amount of token within a protocol. This automatically increases the supply of such token and make the price of such token almost useless, if not completely useless because of the supply.

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What he does after minting the token is that he takes it to the market almost immediately after minting a very large number of such token and dump it on the market. He takes home millions of dollar while the price of such token crashes seriously.

Well, like I've earlier stated, Blockchain system are still vulnerable to attack especially attack like this that result from lapses in the security system which gives rooms for bug and code exploitaion

Tokenomics

Here is the tokenomics of an infinite Mint Attack. Let's take for example, if a Blockchain has a market value of $2 billion and it has 2 million tokens, it therefore means that the price of each token would be $2000.

If afterwards, a successful mint attack was carried out on that chain which led to the minting of additional 1999 million, then the price of the token would crash, because each token will not be $2.

The price literally dropped by 99.9%. This means everyone holding the token would have to suffer huge lose. As people begin to exit, the token crashes and could completely go down to zero...very possible.

*Example of Mint Attack

One of the prominent mint attack is history is that of the Cover Protocol. The hacker exploited a bug in their mining contract and minted an infinite number of token, he minted 40 quintillion token. Mehn! That's huge.

This minted token crashed the price of the token as the hacker dumped them in the market, taking home millions of dollars. The price actually crashed by 97% that's almost a hundred percent.

There are several other example but one thing I want you to understand is how it's been done. The same technique is deployed in all of the mint attack ever carried out on a chain.

Prevention of Mint Attack

I know your question is, are we sure this attack can be prevented? Well the answer is yes...to a remarkable extent. Most of these attack were successful because of the vulnerability they spotted on most smart contracts which gave them the opportunity to exploit the system.

So the first preventative measure is to ensure that smart contract are critically checked and audited before being deployed. This doesn't guarantee an 100 percent security but it sure strengthen the security system because in the process of auditing the smart contract, especially by different expert firms, they would be able to spot loopholes for potential hack.

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Another preventive measure might be to adopt the PoW model which would warrant that miners solves complex mathematical problems before minting a token . It therefore means if would take a whole lot of time and energy to mint 1000 token...unlike how easy it is to mint infinite token on some other chain where PoW is not used.

Furthermore, having a fixed cap on the total supply of coin. This would go a long way in curbing such act as one would not be able to mint more than what have been stipulated for the coin or token.

Lastly, having a masternodes on the network would also serve as a preventative measure, these masternodes would be the final say on the network, which should check and determine if a transaction should be validated and approved or not.

Bottom Line

I believe by now we know what an infinite Mint Attack is and how to prevent them. I trust you've gotten so much from this piece. As my usual custom is, I would always encourage that you DYOR to be sure of every financial step you would want to take as I won't be liable for any form of loss encountered by you.

Feel free to share with me your thoughts in the comment section. Thanks for your time once again. Gracias!

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^{Disclaimer: This post is made as an education and not investment advice. Digital asset prices are subject to change. All forms of crypto investment have a high risk. I am not a financial advisor, before jumping to any conclusions in this matter please do your own research and consult a financial advisor.}

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Regards
@lhorgic♥️

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