Morning Minute | $62M Exploit Threatens Blast Szn

 Morning Minute | $62M Exploit Threatens Blast Szn

Logie's Market Summary

Good morning! 

Today's top news:

  • $62M Exploit and Ensuing Recovery Threatens Blast SZN
  • Two KuCoin founders charged with Bank Secrecy Act and unlicensed money transmission offenses
  • Optimism sets aside 850 million $OP ($3.2 billion) for builders 
  • and more....

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🚀 Failure to Launch?

Two days ago I wrapped up the section on Blast with this quote...."Not all that glitters is GOLD. The first major Blast exploit happened last week and given the infancy of this chain and its protocols, other lurking issues may still rear their head."

I'm saddened to report that the "last day since incident" counter was reset last night. 

Around 5:30 p.m. ET yesterday, Munchables, a popular protocol and Blast Bing Bang Winner announced that its lockdrop contract had been compromised. 

Due to the size of the exploit, more than $62 million in ETH at a minimum, the industry quickly sprung into action and notable investigator ZachXBT identified the exploiter and alleged a malicious developer with potential ties to North Korea within only a few minutes of the Munchables announcement. 

Rollback the Chain? 

Not long after the exploit, one potential solution was amplified loudly on the timeline....rollback the chain. 

Wait, that's possible?!

Yep.

Technical users on Crypto X began suggesting that Blast was uniquely positioned to solve the exploit by potentially rolling back the chain to a previous state....similar to the rollback/DAO Hack that brought us the present day Ethereum blockchain. 

These suggests brought great debate between many of the top personalities in our industry. Some called it foolish to let more than $62 million flow elsewhere in the name of "decentralization." Ryan Selkis of Messari said that another $62 million to North Korea might be "night night for Crypto in the US."

Others brought up the massive can of worms that rolling back four days of transactions (pre-Munchables lockdrop) would open up. And perhaps most importantly, the precedent that rolling back the chain sets and the danger that exists since one party maintains that level of control. 

Is there a right answer? I'm not sure. 

A Happy Ending

Fortunately, we didn't have to find out.

In the middle of the night, the Munchables developer and exploiter opted to return all the funds and the private keys to three separate contracts. Now, $97 million is safely secured in a Blast multisig and Blast core contributors are working with teams affected, like Munchables and Juice Finance, to return funds to users. 

No ransom, hopefully no lost user funds (they still need to go back to users), and a big sigh of relief for the broader crypto ecosystem. This feels like the best possible end scenario. 

As for the practical details about users receiving their funds, Munchables is expected to share more details this week but users will not be held to their previously chosen "locks" and they will also still receive their Blast rewards! 

What's Next for Blast?

This section will be a little bit lighter than I was planning when going to bed last night, unaware that a peaceful resolution would be found. But, I'm still thinking about the major implications this has for Blast moving forward, just as it seemed to be gaining steam. 

This is now two notable exploits in three business days and despite Pacman's urging that teams should focus on security and seek help with audits and more, the confidence of users must be brutally shaken. 

I'll still be using Blast and hoping to stack GOLD where I can, but I'll be holding to my previously shared cautions even more than before, instead opting for opportunities to earn GOLD and points in ways that aren't capital intensive. 

That will hold me out of the highest tier of earners, but also protect my downside. 

I'm content with that. Stay safe out there. 

🚚 What Else Is Happening in NFTs?

Here is the list of other notable headlines from the day in NFTs:

💰 Token, Airdrop & Points Tracker

Highlighting the major token or airdrop news from the day.

ğŸŒŽ Around Crypto and Web3

A few other Crypto and Web3 headlines that caught my eye:

🗓 Upcoming NFT Mints and Reveals

Today is another slower day of drops without major highlights.

With memecoin energy slowing down, it could be a good weekend for any NFTs that catch momentum - so be on the lookout.

It's also a nice setup for a quality stealth drop.

See the full list and dive in for more details with Swizzy's daily mint monitor

  • FLUF World Prysyms (time TBD)
  • A Day in the Life, Guido Disalle/Transient Labs (1:00 p.m. ET)
  • SanFranTokyo Visions (6:00 p.m. ET)

Enjoy this write-up and/or want to sponsor the Morning Minute? Follow along with me on Twitter @lhitch09 or reach out via email logan@luckytrader.com.

Disclaimer: The author or members of the Lucky Trader staff may own NFTs discussed in this post. Furthermore, the information contained on this website or the Lucky Trader mobile application is not intended as, and shall not be understood or construed as financial advice. AI may have assisted in the creation of this content.