Previously Ethereum Mainnet exploit raised some serious concerns in terms of how safe and reliable the Ethereum network can be. The exploit happened when a hacker created a fake BNBHACKERINU token. The rug and pull attack were formulated on the base of harmful code. This raised some serious concerns about the decentralized networks. This happened as the BNB chain was exploited. The hacker produced a version of massive rug and pull attacks after the exploit occurred.
The hacker created $100 million worth of BNB tokens. BSC interchain connection became vulnerable and Binance CEO Changpeng Zhao issued a notice halting the transactions taking place on BSC chain and trading was stopped for some time.
$100k Worth Ethereum Hack and Steal Attempt
A web3 developer with the name of @lorem pointed out the issue of BSC chain hack. This was pointed out by him on the issue of manufactured tokens. As the first hacker issued the tokens, he used the same email address by being a token deployer. He was able to make this happen as the smart contracts have three features in it that led him to steal the token from any account and use it in recirculation. In this specific scenario the Mainnet crypto became vulnerable. Furthermore, the BNB hacker’s real address was located through the contract’s variable.
There was a massive attempt to rip off nearly $100,000 USD worth of Ethereum tokens. The hacker made another attempt to create a different token. Its name was HACKERSHIBA for carrying out same operations. Although a BNB hacker with the name of ZachXBT explained about the original rug pull hack was not made by him. Although the fake tokens are mostly seen as the chains are attacked. This was among one of the salient Ethereum Mainnet issues. This event happened due to rug pull attacks which are common in the crypto sphere.
What is Rug and Pull Attack?
Rug and pull attacks are quite common in the crypto industry. In decentralized finance, it is difficult to filter out the rug and pull scams. A common rug and pull attack happen when the development team suddenly abandons the project and sells or removes entire liquidity. This is common and as the term signifies, rug and pull points to the sudden withdrawal without any immediate warning. The sole purpose of conducting such an attack is to rip people off money and funds.
Rug pulls mostly happen on Decentralized exchanges (DEX’s). Such Defi tokens are not part of some centralized exchanges and DEX’s serve as honeycomb to attract such hackers. As these DEX’s have liquidity pools offering a value worth an attack. Rug and pull attacks come with initial coin offerings (ICOs) and are mostly attached to coins such as ETH and BNB.
As the project gains more popularity and becomes a discussion among the community members. That’s when the investors purchase the coins or tokens. When the ICOs are finished, the investor is sweet baited by locking their funds for some time on the DEX to an agreed guarantee of liquidity.
As no KYC or AML is needed for listing any token on a DEX, such rug pulls tokens birth take place there. Anyone can set up a liquidity pool and its investors are prone to risk. Since these crypto scams are impossible to detect, the project initiators are not easily identifiable.
Rug and Pull Attack Indicators
A common rug and pull attack indication comes with sort of tokens that gain a massive popularity in as short span of time. With this such tokens become popular too soon and investors are keen to lose their profits in fear of missing out (FOMO). In the past Squid Token named after famous South Korean series, Squid Game became quite popular. But after some time, it turned out to be a rug pull attack and attempt. As in the early stages, the price of this token skyrocketed while after some time, it was proven as a rug pull attempt and a sheer rip off.
How to Avoid Common Rug Pull Attacks
Avoiding a common rug pull attack takes due diligence from investors. Since new projects are lucrative for the investors there is also a need to check the background of each project. And how long the project and its core development teams are active with their community members. Furthermore, many projects are making tall claims for the level of advancement they see. But comparison, analysis and background check with complete research is required for any money to be invested in the token. As an investor you must not invest in newly launched tokens. Since different Ethereum networks exist there is a need to make Eth blockchain more secure.
What to Expect from Eth Blockchain Recent Upgrade?
Ethereum 2.0 now has advanced scalability and security enhancement parameters. As most of Point of Sale (PoS) networks require centralized systems and validators. Ethereum came with a solution. Ethereum 2.0 upgrade now requires 16,384 validators which makes it more decentralized and secure than the previous layer.