Terra Blockchain Resumes Operation After $4M Exploit
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Terra Blockchain Halted After Major Exploit
Terra blockchain faced a major exploit on July 31, 2024, causing a network halt to address the breach that siphoned over $4 million in tokens. The stoppage occurred at block height 11430400, giving validators time to implement an emergency fix, as confirmed by Terra's official X.
Blockchain security firm Beosin analyzed the exploit, detailing the stolen assets. A known vulnerability within the inter-blockchain communication (IBC) protocol was targeted, exploiting a "reentrancy vulnerability in the timeout callback of ibc-hooks" through a malicious CosmWasm contract.
The attacker repeatedly called the function, draining assets. This breach led to the loss of 60 million ASTRO tokens, 2.7 Bitcoin (BTC), $3.5 million in USD Coin (USDC), and $500,000 in Tether (USDT). The stolen tokens were sold and bridged to Ethereum (ETH), with the exploiter still holding 19 million ASTRO tokens worth around $350,000.
Astroport's ASTRO token plummeted to $0.01314, stabilizing later at $0.0218, a 53% drop in one day. Terra's LUNA token saw a 2.7% dip, settling at $0.3944 after an initial drop to $0.385.
Terra resumed block production at around 4:19 am UTC, with validators holding over 67% of the voting power on Terra upgrading their nodes to prevent the exploit from recurring.
Terra, or Terra 2.0, is a hard fork from the original Terra blockchain (Terra Classic, LUNC) following the 2022 collapse triggered by the failure of Terra's algorithmic stablecoin, UST.
On August 1, Terra responded to this significant security breach by blacklisting the wallet responsible for a $4 million exploit, caused by vulnerabilities in a third-party module. The platform also pledged full transparency, promising detailed disclosures as investigations progress.
In other news, the SEC has launched an information page for investors affected by Terraform Labs' collapse, following a final court judgment. Founder Do Hyeong Kwon is required to transfer over $204 million to the bankruptcy estate for distribution. This move aims to address losses incurred by investors due to the company's failure. Details on repayment timelines will be announced on the SEC's official website.
Meanwhile, the Terra Luna Classic community is debating a significant increase in the burn tax, potentially raising it from 0.5% to 1.5%. This proposal, championed by Validator JesusisLord, aims to boost contributions to community and oracle pools, enhancing long-term staking rewards.
However, concerns linger over potential repercussions, including major exchanges suspending the burn mechanism if the tax hike proceeds. The proposal's fate hinges on the launch of the Tax2Gas feature in August, critical for its implementation and subsequent governance vote.
Conclusion
This exploit serves as a case study for other blockchain networks to strengthen security measures. Ongoing audits and robust security protocols are crucial to prevent similar incidents. The event may lead to increased scrutiny of inter-blockchain communication protocols and their vulnerabilities.
FAQs
What happened to the Terra blockchain on July 31, 2024?
Terra blockchain suffered a $4 million exploit. The network was halted at block height 11430400 to address the breach. Validators implemented an emergency fix to resume operations.
What assets were stolen in the Terra exploit?
The attacker stole 60 million ASTRO tokens, 2.7 Bitcoin, $3.5 million in USDC, and $500,000 in USDT. Most stolen tokens were sold and bridged to Ethereum, with the exploiter still holding 19 million ASTRO tokens.
How did the exploit affect token prices?
Astroport's ASTRO token plummeted 53% to $0.0218. Terra's LUNA token dipped 2.7%, settling at $0.3944 after an initial drop to $0.385.
This article has been refined and enhanced by ChatGPT.
