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Canto, Astar blockchains plan migration to Ethereum ecoystem as layer 2s

Coin Telegraph
Canto, Astar blockchains plan migration to Ethereum ecoystem as layer 2s
Astar

By inheriting Ethereum’s security, Canto will be more decentralized and will enable trustless guarantees when bridging assets over, Polygon Labs said.

Cosmos-native layer-1 blockchain Canto has become the latest chain to migrate to Ethereum as a layer 2 zero-knowledge rollup, after another layer-1 blockchain, Astar, announced similar plans moving from the Polkadot ecosystem to Ethereum.

Canto is a permissionless general-purpose blockchain, which is Ethereum Virtual Machine (EVM)-compatible with aims to onboard the traditional financial sector to decentralized finance applications.

Upon an official agreement reached by Canto Commons — a framework where contributors coordinate ideas and solutions to the protocol — its core developers will build a ZK rollup on Ethereum’s second layer, Polygon Labs explained on Sept. 18:

“By leveraging a shared ZK bridge, Canto will eventually tap the liquidity of a unified Polygon ecosystem with easy access to Ethereum.”

Polygon Labs said Canto will “inherit” Ethereum’s security, enabling more decentralization and trustless guarantees when bridging assets over:

“User security comes by way of a best-in-class and in-production ZK prover, meaning community security is ensured by cryptography and inherited from Ethereum, rather than the social-economic incentives of fraud proofs.”

There will be no changes to Canto’s validators or staking system, Polygon Labs added.

Canto follows moves from Astar

Canto joins the likes of Astar, Gnosis Pay, Palm and IDEX to have announced plans to build ZK layer 2s using Polygon’s Chain Development Kit in recent months, according to Polygon Labs co-founder Sandeep Nailwal.

On Sept. 13, the Astar team announced it will soon begin building its own Ethereum layer-2 scaling solution, named Astar ZK-Ethereum Virtual Machine (EVM), also using Polygon’s CDK.

“We are building a trustless bridge to Ethereum with high EVM equivalency right out-of-the-box, so dApp developers can use existing tools to build solutions across our entire ecosystem,” the Astar team explained in a Sept. 14 statement.

Polygon Labs hopes the ZK-powered chain will enable businesses to implement Web3 solutions with increased speed, scalability, and security in Japan — where Astar is based — and around the world.

Ryan Sean Adams, co-host of Ethereum show Bankless said the two most recent migrations to Ethereum could be the start of a rollup avalanche.

Not every protocol is sticking around on Ethereum

Meanwhile, some protocols appear to moving the other way.

Decentralized exchange dYdX announced its intention to build a “purely decentralized” order book exchange on Cosmos as part of a plan to migrate away from Ethereum in early September.

Another Ethereum-native protocol, Maker, signaled plans to move to cut ties with Ethereum and build a new, more “efficient” chain with Solana’s codebase in September too.

Related: Idealistic Ethereum community-built zkEVM Scroll launching in weeks

Maker’s co-founder Rune Chistensen added Solana currently stands as the “most promising” ecosystem to explore as it proved its resilience during the FTX debacle and has a high-quality pool of talent developers building on Solana.

Nonfungible token collection OnChainMonkey is also shifting its entire collection of 10,000 NFTs from Ethereum to Bitcoin. The team behind the protocol cited a more secure base layer and a thriving Bitcoin Ordinals ecosystem as the main reason behind the migration plan.

Magazine: DeFi Dad, Hall of Flame: Ethereum is ‘woefully undervalued’ but growing more powerful

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6 things the US needs to stay competitive in crypto, according to execs

6 things the US needs to stay competitive in crypto, according to execs

On-chain tool to seize crypto is a purist’s nightmare, but a must: CEO

Coin Telegraph
<div>On-chain tool to seize crypto is a purist's nightmare, but a must: CEO</div>
Beosin

A U.S. federal court recently used on-chain tech to lock criminals out of their crypto on the Jurat Network. Its founder, Mike Kanovitz, admits it could see hate from crypto purists.

The founder of layer-1 blockchain Jurat has defended his protocol against potential haters, arguing that on-chain legal enforcement is a necessary trade-off for crypto mass adoption. 

On Aug. 8, a U.S. District Court used Jurat’s on-chain enforcement tool to lock several sanctioned individuals out of their crypto accounts. These individuals were sanctioned for money laundering and using ransomware to extort cryptocurrency payments to benefit North Korea’s weapons program.

Speaking to Cointelegraph, Mike Kanovitz, the founder and CEO of Jurat said the judicial order was the first of its kind.

The Jurat blockchain was launched in late 2022, formed via a fork of the Bitcoin blockchain. The technology connects blockchain nodes with court dockets to enforce court orders.

Kanovitz admits that such technology will likely garner criticism from die-hard supporters of decentralization.

“Some people are going to claim to be philosophical purists and hate on it. I get that.

However, the Illinois-based lawyer said such technology could bring the necessary due process protections for digital assets, which will be key to mainstream adoption.

"Some of the people who currently think that there should not be effective law enforcement on-chain would feel differently if they got hacked, defrauded, or lost their private keys. Then they would be relieved that they can recover their property," he expla

In the first half of 2023, $656 million in cryptocurrencies were lost to scams, hacks and rug pulls, according to a June 30 report by blockchain security firm Beosin.

“It will not only tame the lawlessness that scares away would be adopters and draws the ire of government officials, it can unlock incredible utility for commerce,” he added.

Related: MetaCourt’s IDO launch: A paradigm shift in Web3 legal services

Until now, courts have had limited means to effectively freeze and seize crypto funds. A common tactic has been to order centralized crypto exchanges to freeze funds or turn over identifying information of the suspect. 

However, the on-chain enforcement tool works by connecting JTC’s blockchain and software nodes with the user's chosen court. 

During a lawsuit, each party provides the court with a competing hash for what that side wants the court to do. When a ruling is made, the court simply pastes the hash of the winning side, and the software nodes will execute the order autonomously once it accesses the online court docket.

The court attached the Jurat ID’s which JCT’s blockchain nodes then read to block the private keys of the defendants on the JCT Blockchain. Source: Jurat. io.

Kanovitz said the tool currently only works in the United States, and only for the JCT blockchain. However, he hopes to bring JCT’s technology into other Ethereum Virtual Machine-compatible blockchains in the future.

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6 things the US needs to stay competitive in crypto, according to execs

6 things the US needs to stay competitive in crypto, according to execs

BNB Beacon Chain hard fork adds ‘panic’ feature that can ‘halt’ blockchain

Coin Telegraph
<div>BNB Beacon Chain hard fork adds 'panic' feature that can 'halt' blockchain</div>
Binance Smart Chain Evolution Proposal

BNB Beacon Chain mainnet is set to undergo the "ZhangHeng" hard fork around July 19, which will bring new upgrades aimed at improving security.

The Binance-operated BNB Beacon Chain mainnet is set to add a new feature in its upcoming hard fork, which will give the blockchain the ability to “halt” the production of new blocks if certain conditions are met.

In a July 12 statement from BNB Chain, the “ZhangHeng” upgrade is expected to take place at block height 328,088,888, which it expects will occur on July 19.

The hard fork will introduce Binance Evolution Proposal BEP-255, which seeks to implement "on-chain asset reconciliation" — which Binance believes could mitigate damage from potential cross-chain bridge exploits such as the Binance Smart Chain exploit on Oct. 7, 2022. 

"Although some enhancements have been made to improve cross-chain security, such as BEP171, the security of assets on the BNB Beacon Chain itself should also be guaranteed, especially after the bridge exploitation," according to the Github post concerning BEP-255. 

Binance explained that under the BEP, user balance changes will be tracked in each block and will be reconciled to identify any issues.

“When there are reconciliation errors, the blockchain will panic and stop producing new blocks.”

Binance said the action will impact "downstream services such as bridges, deposits, and withdrawals on exchanges" but the "drastic action" is necessary to protect the chain and its users. 

Bringing the blockchain back online will require a hard fork and will require addressing the reconciliation error. 

"For example, if exploitation exists, related accounts should be blacklisted or corrected. Once the blockchain is resumed, downstream services can be brought back up as well," it explained.

Rogue Key Attacks and other upgrades

Other changes include a bug fix to prevent “Rogue Key Attacks” — a security issue where a perpetrator produces a valid aggregate signature for a transaction as opposed to the true owner of the private keys.

“To fix the bug, all existing vote addresses will be cleared up when the height of hardfork reached,” the firm said, adding that validators will need to add vote addresses again.

The hard fork will also purport to make the chain capable of handling more complex business rules and logic.

Related: A beginner’s guide to the BNB Chain: The evolution of the Binance Smart Chain

Binance said the hard fork needs two-thirds of validators to switch their software version to v0.10.16 beforehand, otherwise, complications may arise.

Full nodes that fail to upgrade will not be able to execute further blocks after the hard fork block height, BNB Chain explained.

BNB Chain outlined a full set of instructions explaining how node operators can comply with the hard fork upgrade, but noted that BNB token holders that use Binance.com, other centralized exchanges or cold wallets, no action is currently required.

On June 19, BNB Chain launched opBNB — a new Ethereum Virtual Machine (EVM)-compatible layer-2 scaling solution based on Optimism’s OP Stack.

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6 things the US needs to stay competitive in crypto, according to execs

6 things the US needs to stay competitive in crypto, according to execs

Coinbase layer-2 network Base closes in on mainnet launch

Coin Telegraph
Coinbase layer-2 network Base closes in on mainnet launch
bounty

While a date for mainnet wasn’t announced, the Base team said it’s now fulfilled 4 out of 5 of their criteria for launch.

Base, a new layer 2 application-focused protocol by Coinbase has just one criteria left to fulfil  before being ready for mainnet launch.

On June 29, the team said the Optimism-powered, Ethereum-secured network has been subject to six months of rigorous security audits — both internally and externally — its second-last criteria required for launch.

“With the completion of these audits, we’ve now fulfilled ⅘ of our criteria for mainnet launch,” Base said, adding that they feel confident after not finding any critical code bugs:

“Completing these in-depth security workstreams without discovering critical severity bugs gave the Base team confidence to proceed towards mainnet launch.”

The other three criteria passed included a “Regolith” hard fork in testnet, a successful infrastructure review with OP labs — the team behind Optimism — and Optimism’s “Bedrock” upgrade.

Coinbase officially launched Base on February 23, which aims to be a low-cost, secure, developer-friendly network for building decentralized applications.

To “battle-test” Optimism’s tech stack, Coinbase’s protocol security team conducted its own internal audit to identify any vulnerabilities that may emerge on layer 1, layer 2 and on the bridges.

In addition to Coinbase's internal audit, Base invited the broader community to partake in a public smart contract audit test via Code4rena to report bugs found in the Optimism’s tech stack:

“We engaged over 100 security researchers as part of this contest, and are happy to report there were no significant vulnerabilities discovered.”

Among the audits investigated by the security researchers included Optimism’s node software, Ethereum Virtual Machine (EVM) equivalence vulnerabilities, bridge vulnerabilities and miscellaneous smart contract issues.

The community audit ran from May 27 to June 10 with a maximum of $100,000 in rewards handed out to successful bounty hunters.

Demonstrating “testnet stability” is the final criteria that needs to be passed prior to mainnet launch, according to a previous post from Base.

The five criteria required for Base to launch on mainnet. The timeline provided by Base was published on May 25. Source: Base

While Base didn’t state how the final criteria would be fulfilled exactly, the team said that they’re still reviewing submissions from the 100 researchers that took part in the public smart contract audit in addition to reviews from past audit programs — namely “spearbit” and “sherlock.”

Base added that they’ve built Pessimism, an open source monitoring tool which aims to notify builders of any anomalies that may arise in the protocol, such as account balance irregularities, contract events, or disparities between L1 and L2 states.

Related: Coinbase CEO says Bitcoin Lightning is 'something we’ll integrate'

In late March, Coinbase said they want to see an inflation-pegged “flatcoin,” an on-chain reputation system and an on-chain limit order book exchange built on Base.

Many considered the development of Base to be a “massive vote of confidence for Ethereum” when the news was first announced in late February.

Secured on Ethereum and powered by layer-2 network Optimism, Base aims to eventually become a network for building decentralized applications.

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6 things the US needs to stay competitive in crypto, according to execs

Starknet moves closer to EVM compatibility with upcoming ‘Kakarot’ testnet

Coin Telegraph
Starknet moves closer to EVM compatibility with upcoming ‘Kakarot’ testnet
Coin Telegraph

With fresh funding under its belt, a new zkEVM is set to go to testnet in August, allowing developers to write in any EVM-compatible language on Starknet.

Starknet, a zero knowledge layer-2 scaling solution for Ethereum is one step closer to becoming fully Ethereum Virtual Machine (EVM) compatible pending an August testnet launch of Kakarot, a new zkEVM.

On June 3, the Kakarot team announced it had received new backing from Ethereum cofounder Vitalik Buterin, Ledger co-founder Nicholas Bacca and Starkware.

In an interview with Cointelegraph, Kakarot CEO and Co-Founder Elias Tazartes explained that while Starknet stands as a leading Zero Knowledge roll-up in the Ethereum ecosystem, it's not EVM compatible, so there’s “kind of a barrier to entry.”

Starknet is used by developers to scale decentralized applications, transactions and computation on Ethereum, but uses its own native language Cairo. According to Starknet, the use of Cairo makes it easier and faster to develop, review and maintain new code.

The downside is that it isn’t EVM compatible, which could dissuade some developers.

“The greatest impact that Kakarot can have is to make Starknet EVM compatible.”

“Kakarot right now is like a Solidity or any language engine. Eventually you will be able to put that engine within Starknet to make it EVM compatible.”

At present, Starknet runs its own custom smart contract Virtual Machine dubbed “Cairo VM” that leverages its native coding language Cairo. This means that Starknet doesn’t have direct EVM compatibility out of the box, something that could prove to be a significant hurdle for overall rollup performance.

Kakarot co-founder Elias Tazartes.

“Some teams really need to be able to use Solidity. For example, if someone wrote a DEX or an AMM for the Ethereum ecosystem and now has 60,000 lines of code already audited, ready to go, but it’s only on EVM chains.”

If these developers wanted to start using Starknet they would have to hire a whole new dev team, write in, audit the code again and maintain two code bases, becoming what Tazartes describes as “prohibitively expensive.”

Related: More TPS, less gas: Ethereum L2 Starknet outlines performance upgrades

According to Tazartes, the idea for the zkEVM was first floated during a Starkware conference in July 2022. By October, the development team was able to together for a week during a hacker house event in Lisbon, Portugal to get cracking on the new zkEVM.

Two months and 20 days later in December, the coding for the project was complete, arriving at a fully functional execution layer — all of which was achieved without any venture funding.

Notably, Tazartes said that Ethereum cofounder Vitalik Buteirn later invested in Kakarot due to his enthusiasm toward a multiple-zkEVM approach to building out the Ethereum ecosystem.

“For Vitalik, the more zkEVMs the better, because as long as you have a wide diversity of architecture and diversity of approaches…then this is really good for the space as a whole.”

Tazartes shared that the testnet version of Kakarot will be launched for public use in August this year.

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6 things the US needs to stay competitive in crypto, according to execs

Vitalik Buterin: Ethereum ‘fails’ without these 3 important ‘transitions’

Coin Telegraph
Vitalik Buterin: Ethereum ‘fails’ without these 3 important ‘transitions’
Coin Telegraph

Layer-2 scaling, wallet security and privacy-preserving features are all necessary to secure Ethereum’s future, according to the Ethereum co-founder.

Ethereum co-founder Vitalik Buterin believes the success of Ethereum will come down to three major technical “transitions” that need to happen almost simultaneously — layer-2 scaling, wallet security and privacy-preserving features.

In a June 9 post via his personal blog, Buterin explained that the Ethereum blockchain outright “fails” without sufficient scaling infrastructure to make transactions cheap.

“Ethereum fails because each transaction costs $3.75 ($82.48 if we have another bull run), and every product aiming for the mass market inevitably forgets about the chain and adopts centralized workarounds for everything,” he said.

Another point of failure, according to Buterin, is around wallet security as it relates to smart contract wallets. 

He explained that a move to smart contract wallets has added more complexity for users wishing to obtain the same address across Ethereum and various layer-2s.

Buterin said this issue stands for both Ethereum Virtual Machine (EVM)-equivalent and non-equivalent layer-2s:

“Even when you can have hash equivalence, the possibility of wallets changing ownership through key changes creates other unintuitive consequences.”
Ethereum needs to improve its layer-2 scalability, wallet security and privacy features, according to Buterin. Source: Vitalik Buterin’s website

In addition to wallets securing crypto assets, Buterin explained that wallets would need to secure data in order to truly transition into an on-chain world with zero-knowledge rollups:

“In a ZK world, however, this is no longer true: the wallet is not just protecting authentication credentials, it's also holding your data.”

The last of Buterin’s three transitions — privacy — will need to come in the form of improved identity, reputation and social recovery systems.

“Without the third, Ethereum fails because having all transactions (and POAPs, etc) available publicly for literally anyone to see is far too high a privacy sacrifice for many users, and everyone moves onto centralized solutions that at least somewhat hide your data,” he said.

The Ethereum co-founder suggested that stealth addresses could be implemented to resolve this issue.

Related: Vitalik Buterin reveals 3 ‘huge’ opportunities for crypto in 2023

Buterin said that achieving all three will be “challenging” because of the “intense coordination” involved between them.

He admitted that each of the three transitions “weaken” the “one user — one address” model, which, in turn, may complicate the way transactions are executed.

“If you want to pay someone, how will you get the information on how to pay them?”

“If users have many assets stored in different places across different chains, how do they do key changes and social recovery?" he added.

Buterin concluded by stressing the need to build infrastructure that ultimately improvers user experience:

“Despite the challenges, achieving scalability, wallet security, and privacy for regular users is crucial for Ethereum's future. It is not just about technical feasibility but about actual accessibility for regular users. We need to rise to meet this challenge.”

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6 things the US needs to stay competitive in crypto, according to execs

6 things the US needs to stay competitive in crypto, according to execs

Aave’s proposal to launch on zkEVM passes ‘temperature check’ vote

Coin Telegraph
Aave’s proposal to launch on zkEVM passes ‘temperature check’ vote
Aave

A proposal to deploy the third version of lending protocol Aave has recently passed a “temperate check” with an overwhelming favorable majority.

A "temperature check" proposal to deploy the decentralized exchange (DEX) Aave on the zkSync Era Mainnet has passed with overwhelming support from the Aave community. 

When voting closed on April 16 more than 99% of Aave (AAVE) token holders voted in favor of launching the third version of the lending and borrowing protocol on the zero-knowledge Ethereum Virtual Machine (zkEVM).

According to the proposal first pitched on March 26, the launch will be limited to USD Coin (USDC) and Ether (ETH).

Now that the temperature check has indicated a "positive sentiment," the next steps listed in the proposal will be to proceed to another stage for further discussion, followed by risk parameter evaluation and finalization of the proposal.

If the next stages are successful the proposal will be submitted for voting and on-chain governance approval.

Only around 0.02% voted against the proposal with a further 0.02% abstaining from voting.

According to the proposal, deploying on zkSync can benefit the Aave ecosystem by introducing new users into decentralized finance (DeFi) and cementing Aave as a premier borrowing platform within the zero-knowledge ecosystem.

Related: Stablecoin adoption could lead to DeFi growth, says Aave founder

The Aave community previously voted to deploy the Aave V3 codebase on zkSync's v2 Testnet, which was approved in another off-chain vote.

Decentralized exchange Uniswap is also set to launch on the zkEVM solution from scaling solution provider Polygon after a governance proposal was successfully passed.

In November 2022, Aave changed its governance procedures after it was hit by a $60 million short attack that ultimately failed.

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6 things the US needs to stay competitive in crypto, according to execs

6 things the US needs to stay competitive in crypto, according to execs

zkSync Era denies 921 ETH ‘stuck forever’ in smart contract

Coin Telegraph
<div>zkSync Era denies 921 ETH 'stuck forever' in smart contract</div>
Coin Telegraph

One member of the cryptocurrency subreddit pointed out that “EVM equivalent” compilers like zkSync Era does not necessarily mean it is fully “EVM compatible.”

Matter Labs, the team behind Ethereum layer 2 scaling solution zkSync, has denied that 921 Ether (ETH)  worth $1.7 million will be "stuck forever" in one of its new projects.

The statement comes as one zkSync project is currently experiencing issues in transferring the funds that it accumulated during its token sale.

In a response tweet, Matter Labs confirmed that they're working to solve the problem and will soon publish a "detailed update."

The issue appears to have been caused by its new zero-knowledge Ethereum Virtual Machine solution, "zkSync Era," not being fully Ethereum Virtual Machine (EVM)-compatible.

While the zero-knowledge rollup solution is “EVM-equivalent,” the two systems compile smart contract code ever so slightly differently from one another, which, in some cases may result in errors in the compiling process.

Several members of the “CryptoCurrency” subreddit expressed their frustration on the matter:

“Another example of why a chain shouldnt be rushing its mainnet launch. Always remember this guys, EVM compatible =/= EVM equivalent.”

"I'm all in for seeing Zero Knowledge tech becoming more and more relevant in the crypto space. However, these chains also have to take into consideration the fact that people's funds are at stake,” said another.

Related: zkSync Era launches with Uniswap and Sushi — First zkEVM on mainnet

The project is believed to be GemstoneIDO (GEMS). On the zkSync explorer page, the last four transactions requests have "failed," while exactly 921 Ether is stored in its smart contract.

GemstoneIDO is believed to be the project impacted on zkSync. However, Matter Labs has not confirmed this. Source: zkSync Explorer

Matter Labs launched zkSync Era on mainnet last week, promising that decentralized exchanges Uniswap and SushiSwap would be live in a matter of days. That hasn't happened yet, however projects including Argent, Celer Network and MetaMask are live on the network now.

Cointelegraph reached out to Matter Labs, who reiterated funds weren't stuck forever and promised an update shortly.

This is a developing story, and further information will be added as it becomes available.

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6 things the US needs to stay competitive in crypto, according to execs

6 things the US needs to stay competitive in crypto, according to execs

Buterin weighs in on zk-EVMs impact on decentralization and security

Coin Telegraph
Buterin weighs in on zk-EVMs impact on decentralization and security
Client

Vitalik Buterin has weighed the impacts of the addition of zk-EVMs at the protocol level, saying it could speed up the verification process on the base layer.

Ethereum co-founder Vitalik Buterin wants to see zero-knowledge Ethereum Virtual Machines (zk-EVMs) built on Ethereum’s first layer to speed up the verification process on the base blockchain.

Buterin explained in a March 31 post that it’s possible to integrate a zk-EVM on the base layer without compromising on decentralization and security. The technology enables Ethereum Virtual Machines to execute smart contracts on the blockchain with ZK proofs.

Ethereum was developed with a “multi-client philosophy” to ensure decentralization at the protocol level, Buterin explained. By integrating zk-EVMs at the Ethereum layer 1, it would be the third type of client.

“Once that happens, zk-EVMs de-facto become a third type of Ethereum client, just as important to the network's security as execution clients and consensus clients are today.”

The other two clients are the “consensus” and “execution” clients. The consensus client implements proof-of-stake to ensure nodes in the network reach agreement. While the execution listens to new transactions broadcasted in the network, executes them in standard EVM and holds a copy of the latest state of the blockchain.

In championing the idea of zk-EVM verification at the Ethereum base layer, Buterin firstly considered the advantages and drawbacks of treating the layer 1 as a “clearinghouse” by pushing almost all activity to layer 2’s.

He said many layer 1-based apps would become “economically nonviable” and that small funds — worth a few hundred dollars or less — may get “stuck” in the event that gas fees grow too large.

Buterin explained that zk-EVMs would need to be “open” in that different clients each have different zk-EVM implementations and each client waits for a proof that is compatible with its own implementation before accepting a block as valid.

He prefers this approach because it wouldn’t abandon the “multi-client” paradigm, and an open zk-EVM infrastructure would also ensure that new clients could be developed, which would further decentralize Ethereum at the base layer.

Related: ConsenSys zkEVM set for public testnet to deliver secure settlements on Ethereum

Buterin said zkEVMs may be the solution to “The Verge,” a part of the Ethereum roadmap which aims to make verification at the base layer easier.

Buterin acknowledged that the zk-EVM infrastructure may cause data inefficiency and latency issues, however he said those challenges wouldn’t be “too hard” to overcome.

If the zk-EVM ecosystem is implemented, it would make running a full node on Ethereum even easier, Buterin explained:

“Ethereum blocks would be smaller than today, anyone could run a fully verifying node on their laptop or even their phone or inside a browser extension, and this would all happen while preserving the benefits of Ethereum's multi-client philosophy.”

Ethereum layer-2 scaling platform Polygon has made considerable progress with its zk-EVM, having recently open-sourced its zkEVM to the Polygon mainnet on March 27, promising reduced transaction costs and increased throughput of smart contract deployments.

StarkWare, ConsenSys, Scroll, zkSync and Immutable are also deploying similar zkEVM scaling solutions.

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6 things the US needs to stay competitive in crypto, according to execs

6 things the US needs to stay competitive in crypto, according to execs

Hedera confirms exploit on mainnet led to theft of service tokens

Coin Telegraph
Hedera confirms exploit on mainnet led to theft of service tokens
Coin Telegraph

Hedera said the March 9 smart contract exploit has not impacted the network or its consensus layer.

Hedera, the team behind distributed ledger Hedera Hashgraph, has confirmed a smart contract exploit on the Hedera Mainnet that has led to the theft of several liquidity pool tokens.

Hedera said the attacker targeted liquidity pool tokens on decentralized exchanges (DEXs) that derived its code from Uniswap v2 on Ethereum, which was ported over for use on the Hedera Token Service.

The Hedera team explained that the suspicious activity was detected when the attacker attempted to move the stolen tokens across the Hashport bridge, which consisted of liquidity pool tokens on SaucerSwap, Pangolin and HeliSwap. Operators acted promptly to temporarily pause the bridge.

Hedera didn’t confirm the amount of tokens that were stolen.

On Feb. 3, Hedera upgraded the network to convert Ethereum Virtual Machine (EVM)-compatible smart contract code onto the Hedera Token Service (HTS).

Part of this process involves the decompiling of Ethereum contract bytecode to the HTS, which is where Hedera-based DEX SaucerSwap believes the attack vector came from. However, Hedera didn’t confirm this in its most recent post.

Earlier, Hedera managed to shut down network access by turning off IP proxies on March 9. The team said it has identified the “root cause” of the exploit and is “working on a solution.”

"Once the solution is ready, Hedera Council members will sign transactions to approve the deployment of updated code on mainnet to remove this vulnerability, at which point the mainnet proxies will be turned back on, allowing normal activity to resume," the team added.

A notice posted by Hedera on its status webpage cautioned users that its network would not be accessible. Source: Hedera

Since Hedera turned off proxies shortly after it found the potential exploit, the team suggested tokenholders check the balances on their account ID and Ethereum Virtual Machine (EVM) address on hashscan.io for their own “comfort.”

Related: Hedera Governing Council to buy hashgraph IP and open-source project’s code

The price of the network’s token Hedera (HBAR) has fallen 7% since the incident roughly 16 hours ago, in line with the broader market fall over the last 24 hours.

However, the total value locked (TVL) on SaucerSwap fell nearly 30% from $20.7 million to $14.58 million over the same timeframe:

The TVL on SaucerSwap fell sharply following the news of the exploit. Source: DefiLlama

The fall suggests a significant amount of tokenholders acted quickly and withdraw their funds following the initial discussion of a potential exploit.

The incident has potentially spoiled a major milestone for the network, with the Hedera Mainnet surpassing 5 billion transactions on March 9.

This appears to be the first reported network exploit on Hedera since it was launched in July 2017.

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6 things the US needs to stay competitive in crypto, according to execs

6 things the US needs to stay competitive in crypto, according to execs

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