Comprehensive Analysis of Shibarium’s Recent Security Breach
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The Shibarium Network Faces a Significant Security Breach
Shibarium, an Ethereum-based Layer 2 scaling solution intricately linked with the Shiba Inu ecosystem, recently encountered a substantial security compromise. This breach resulted in the loss of approximately $2.4 million in assets. The situation necessitated an immediate and rigorous emergency response from the involved teams.
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Exploit of Bridge Funds by Hacker to Acquire 4.6M BONE Tokens
On September 13, the development team behind the Shiba Inu (SHIB) token disclosed through a social media post that a hacker exploited funds from a previous bridge security flaw. This allowed the acquisition of 4.6 million BONE tokens within a single block, imitating a flash loan operation. This tactic temporarily provided the attacker with significant validator voting influence, enabling them to approve a malicious state within the Shibarium network, where BONE serves as the governance token.
The transaction was executed using assets directly transferred from the bridge, including 224.57 Ethereum (ETH) valued at $1.05 million, and 92.6 billion SHIB, equivalent to $1.30 million. Despite this, the BONE tokens are still locked with validators due to the staking protocols, thus preventing immediate withdrawal by the attacker.
This incident underscores a significant vulnerability within the Ethereum layer 2 solution. The Shiba Inu team highlights that evidence points to the breach of 10 out of 12 validators’ signing keys, with only K9 Finance and Unification validators successfully resisting the malicious signing attempt.
Moreover, additional assets such as LEASH ($645,000), ROAR ($284,000), TREAT ($50,000), BAD ($17,000), and SHIFU ($10,000) were also siphoned off, yet remain unsold. The hacker’s attempt to liquidate approximately $700,000 worth of stolen KNINE tokens was foiled when the K9 Finance DAO multisig blacklisted the hacker’s address, permanently freezing 248 billion KNINE tokens.
Shibarium Team Outlines Security Measures and Future Plans
In response to the crisis, the Shiba Inu team has suspended staking and unstaking activities to protect community assets. Stake manager funds have been transferred from proxy contracts into a secure 6-of-9 hardware multisig wallet. Moreover, renowned blockchain security teams, including Hexens, Seal911, and PeckShield, have been engaged to conduct a detailed forensic investigation into the breach.
Furthermore, Kaal Dhairya, a Shiba Inu developer, indicated that while damage control and investigations are ongoing, the team is open to negotiating with the hacker. They are willing to offer leniency and potentially a small bounty if the misappropriated assets are returned.
Following this breach, the Shibarium ecosystem tokens have experienced varying levels of price depreciation. The Shiba Inu (SHIB) token is currently trading at $0.000014, reflecting a 1.67% decrease in the past day. Similarly, LEASH and BONE have seen declines of 5.69% and 21.98%, respectively, over the same period.
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