- Safemoon’s liquidity pool was compromised due to a “public burn bug” exploit, resulting in a loss of nearly $8.9 million.
- The project has previously faced controversies due to its celebrity endorsements and allegations of misleading investors.
- Safemoon’s CEO reassured users that the decentralized exchange is safe, and the team has taken swift action to address the issue.
The decentralized finance (DeFi) world was recently hit by yet another hack, this time targeting the Safemoon liquidity pool (LP). An exploiter drained nearly $9 million from the BNB chain-based exchange Safemoon’s LP. The platform has since identified and addressed the issue, but the damage has left the crypto community reeling.
The Safemoon LP Hack – A Public Burn Bug Exploit
According to an investigation conducted by security firm Peckshield, the vulnerability stemmed from a recent update that introduced a “public burn bug.” This bug allowed the exploiter to burn most SFM tokens in the Safemoon LP, artificially raising the token’s price. The exploiter then sold enough tokens back to the LP in a single transaction to drain the WBNB from the contract, resulting in a loss of almost $8.9 million.
The Safemoon team quickly informed the community of the LP compromise, stating on Twitter: “To the @SAFEMOON community: We want to inform you that our LP has been compromised. We are taking swift action to resolve the issue as soon as possible.” Safemoon CEO John Karony further clarified that the hack was related to a single LP on BNB Chain and reassured users that the decentralized exchange (DEX) was safe.
Safemoon’s Celebrity Endorsements and Previous Controversies
Safemoon, a project previously endorsed by celebrities and social influencers such as Jake Paul and Soulja Boy, has faced scrutiny. In February 2022, a lawsuit alleged that musicians like Nick Carter, Soulja Boy, Lil Yachty, and YouTubers Jake Paul and Ben Phillips mimicked real-life Ponzi schemes by misleading investors to purchase Safemoon tokens under the pretext of unrealistic profits.
The recent LP hack has caused financial loss and raised concerns about the project’s security and the potential risks associated with celebrity-endorsed cryptocurrencies.
The Safemoon LP hack is a stark reminder of the risks associated with decentralized finance and the need for robust security measures in the industry. As DeFi platforms continue to grow in popularity, so do the threats from hackers and bad actors.
To protect users and their assets, DeFi projects must prioritize regular security audits, maintain transparent communication with their communities, and promptly address vulnerabilities when they arise. The Safemoon hack also highlights the importance of users conducting due diligence when investing in cryptocurrencies, especially those endorsed by celebrities and social influencers, who may need more technical expertise to assess the security and potential of the projects they promote.
While the project has taken swift action to rectify the issue and minimize further damage, the hack serves as a potent reminder of the potential risks in the DeFi space. As the industry matures, security must remain a top priority for developers and users. With vigilance and collaboration, the DeFi community can learn from incidents like these to build a more secure, transparent, and sustainable financial future.
