This DeFi Protocol on Coinbase’s Base Network Was Hacked

Grand Base experienced a devastating hack and a significant security breach that shocked the DeFi community.

The exploit, driven by a compromised private key, led to unauthorized transactions that have shaken investor confidence and spotlighted vulnerabilities within the DeFi ecosystems.

DeFi Hack: Over $2 Million Vanishes

Early reports from blockchain security firm Certik reveal that the breach occurred when a malicious actor accessed the Grand Base deployer’s wallet. This entity initiated transactions, leading to a dramatic sell-off of assets worth approximately $2 million.

This action caused more than 99% slippage in the project’s GB token value, severely impacting the market stability.

The attacker’s method involved minting new GB tokens directly after accessing the deployer’s wallet. These newly created tokens were then exchanged and subsequently bridged into the Ethereum ecosystem, compounding the protocol’s losses.

Read more: Identifying & Exploring Risk on DeFi Lending Protocols

Analysts at AI Web3 security firm Cyvers told BeInCrypto the criticality of the situation. They noted that the attacker’s ability to mint new tokens magnified the financial damage and exposed severe security flaws.

“The compromised deployer’s wallet losing access control raises concerns, emphasizing the urgency for heightened security protocols and vigilant monitoring to safeguard against such devastating losses in the future,” analysts at Cyvers emphasized.

Further exacerbating the situation, the system recorded two significant transactions from the compromised wallets. These moved 206 and 319 ETH, respectively, to external addresses.

In response to the crisis, Grand Base announced the compromise on its Telegram channel and assured users that they were actively taking steps to address the security breach. The team highlighted the loss of control over their developer wallet as a pivotal point of the attack.