The price of RUNE, the native token of decentralized finance (DeFi) liquidity protocol Thorchain, dropped by about 15% today following yesterday’s attack which saw hackers drain 2,500 Ethereum (ETH) tokens (around $4.8 million at current prices) from the platform’s liquidity pools.
At the time of writing, RUNE was trading at around $4.82, down 15.1% over the past 24 hours, according to crypto metrics platform CoinGecko.
Yesterday, Thorchain had to pause the network after it was attacked by a hacker (or a group of them), resulting in the loss of millions of dollars worth of crypto assets.
Initially, Thorchain developers stated that a total of 13,000 ETH ($25.1 million) had been stolen. Shortly after, however, they scaled their estimates first down to 4,000 ETH ($7.6 million), and then to 2,500 ETH ($4.8 million) in the latest update.
“Original loss was estimated at 13,000 ETH, but is now estimated to be 2,500 ETH. The discrepancy may be due to additional loss from arbitrageurs taking advantage of the price manipulation,” Thorchain developers wrote in the updated post mortem announcement.
While crypto markets are maturing, developing more financial products, and gaining users, most crypto assets are still marooned on their native networks. This means assets minted on a network like Ethereum cannot be used or directly traded to another crypto network, like the Bitcoin blockchain or Binance Smart Chain.
Swapping assets across blockchains is reliant on middlemen in the form of exchanges, such as Coinbase or Binance—or is dependent on tokenized versions of assets, such as Wrapped Bit...
In its turn, RUNE is using a token model that increases the asset’s value as the utilization of the network grows. Essentially, this means that the more liquidity there is in Thorchain’s pools, the higher RUNE’s price gets—and vice versa, as the recent attack has demonstrated.
Interestingly, Thorchain developers also stated that some of the network’s members might even have profited from the hacker attack.
“The attacker paid huge slip fees, approx $1.4m was captured by nodes, with further $1.4m by ERC20 LPs [liquidity providers]. Only users affected are ETH LPs, and they will be made whole,” Thorchain developers tweeted. “So despite the exploit, Nodes, LPs and Arbers will stand to profit considerably.”
The only entity that will wear the burden will be the THORChain treasury, approx $5m will be used to donate to ETH LPs.
This is the purpose of the treasury during Chaosnet, to insure the network funds.
Onwards
— THORChain #ACTIVATETHESYNTHS⚡️ (@THORChain) July 16, 2021
The team further explained that Thorchain’s treasury is likely the only entity that will bear the burden after the attack since its funds will be used to donate approximately $5 million worth of digital assets to Ethereum liquidity providers.
Disclaimer
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.
Daily Debrief Newsletter
Start every day with the top news stories right now, plus original features, a podcast, videos and more.
The Babylon Foundation, an entity tied to the Bitcoin staking protocol Babylon, released tokenomic details for its BABY token Thursday—and revealed an airdrop for early users.
The Foundation will provide 6% or 600 million BABY, the Babylon Genesis Network’s native governance token, to five reward groups and early supporters as part of its airdrop. The vast majority of tokens (585 million) set aside for the airdrop campaign will be provided to those who have staked Bitcoin with Babylon.
“Tokens...
Paul Atkins, President Trump’s nominee to become the next Chair of the Securities and Exchange Commission, passed a key vote from the U.S. Senate Banking Committee on Thursday.
Following the 13-11 vote, in which all Democrats on the Committee opposed Trump’s pick, Atkins’ nomination will now proceed to the Senate floor for a full vote.
Atkins is an SEC veteran who previously served as an agency commissioner under President George W. Bush. He is widely expected to institute favorable policies for...
Monday marked the end of a painful quarter for Ethereum, as the network’s native asset’s so-called burn rate fizzled amid one of its worst performances in recent memory.
The metric, which tracks the rate of Ethereum removed from circulation, recently hit its lowest level since August 2021, a nagging concern among investors that’s “weighed on Ethereum’s market performance,” according to the crypto market maker Wintermute.
Last week, around 53 ETH was burned per day, the firm said. Meanwhile, ETH’...