Avalanche-Based Stars Arena Falls Victim To A $3 Million Exploit, TVL Tanks By 100%

Opeyemi Sule

1 year ago

3 mins read

Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Created by industry experts and meticulously reviewed

The highest standards in reporting and publishing

How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

Stars Arena, a decentralized social media platform built on the Avalanche network, has suffered a major security breach, resulting in the loss of a significant amount of cryptocurrency. This comes barely a day after the decentralized application (dApp) reportedly fixed a loophole in its smart contract.

On Thursday, October 5, the Stars Arena team said – via a post on X (formerly Twitter) – that it has averted a security exploit, which could have led to the loss of over $1 million worth of funds.

Stars Arena Loses $2.9 Million To Attack, PeckShield Reveals

On Saturday, October 7, a pseudonymous X user raised the alarm about the suspicious movement of Avalanche (AVAX) tokens from the Stars Arena contract.

A few minutes after this, the protocol’s team confirmed – via a post on X – that there has been a “major security breach with its smart contract.”

There has been a major security breach with the smart contract.

We're actively checking the issue.

DO NOT deposit any funds.

Stay tuned for updates.

— The Arena (@TheArenaApp) October 7, 2023

This exploit has also been flagged by blockchain security firm PeckShield, who disclosed that around $2.9 million in AVAX has been drained from the decentralized social media application.

An initial breakdown by the security company identified a reentrancy issue on the Stars Arena Shares contract. “The reentrancy is abused to update the weight when the share/ticket is issued so that 1 share can be sold at a much higher price of approximately 274,000 AVAX,” PeckShield said.

As earlier noted, Stars Arena has been gaining some popularity in the past few days. In fact, the recent activity uptick on the Avalanche network has been attributed to the rise of the decentralized social application.

However, this latest hack represents a significant deterrent to Stars Arena’s growth. According to data from DeFiLlama, the protocol’s total value locked has plummeted from $1.26 million to $0.47 in the past day, reflecting a 100% decline.

Stars Arena went live on Avalanche C-Chain – the blockchain component specifically designed for running smart contracts on Avalanche – in late September. Although the Friend.tech-like platform experienced some traction after launch, recent security concerns seem to be stirring skepticism around its growth.

$900 Million Lost To Bad Actors In 2023 Q3

This latest exploit will serve as an unfriendly reminder of the growing security concerns in the crypto space. Particularly, the cryptocurrency industry saw a significant surge in exploits and security breaches in the third quarter of 2023.

According to a quarterly report by blockchain security firm Beosin, the losses incurred only in Q3 2023 were larger than the total for the year’s first half. A total of $889.26 million was lost to various attacks in the last quarter, compared to the $663 million lost in 2023’s first six months.

Source: Beosin/X

Beosin’s report revealed that $540.1 million was lost to hacks, with decentralized finance (DeFi) accounting for 18% of this value. Notably, DeFi peer-to-peer service Mixin Network lost $200 million due to a compromise in its cloud service provider database.

AVAX price facing resistance at $11 on the daily timeframe | Source: AVAXUSDT chart on TradingView

Featured image from Shutterstock, chart from TradingView

Opeyemi Sule

Opeyemi is a proficient writer and enthusiast in the exciting and unique cryptocurrency realm. While the digital asset industry was not his first choice, he has remained absolutely drawn since making a foray into the space over two years. Now, Opeyemi takes pride in creating unique pieces unraveling the complexities of blockchain technology and sharing insights on the latest trends in the world of cryptocurrencies.

Opeyemi savors his attraction to the crypto market, which explains why he spends the better parts of his day looking through different price charts. “Looking” is a rather simple way to describe analyzing and interpreting various price patterns and chart formations. However, it appears that is not Opeyemi’s favorite part - in fact, far from it.

Being able to connect what happens on a price chart to on-chain movements and blockchain activities is what keeps Opeyemi ticking. “This emphasizes the intricacies of blockchain technology and the cryptocurrency market,” he would say. Most importantly, Opeyemi thinks of any market insights as the gospel, while recognizing that he is only a messenger.

When he is not clicking away at his keyboard, Opeyemi is most definitely listening to music, playing games, reading a book, or scrolling through X. He likes to think he is not loyal to a particular genre of music, which can be true on many days. However, the fast-rising Afrobeats genre is a staple in Opeyemi’s Spotify Daily Mix.

Meanwhile, Opeyemi is a voracious reader who enjoys a wide category of books - ranging from science fiction, fantasy, and historical, to even romance. He believes that authors like George R. R. Martin and J. K.
Rowling are the greatest of all time when it comes to putting pen to paper. Opeyemi believes his reading of the Harry Potter series twice is proof of that.

Indeed, Opeyemi enjoys spending most of his time within the four walls of his home. However, he also sometimes finds solace in the company of his friends at a bar, a restaurant, or even on a stroll. In essence, Opeyemi’s ambivert (haha! been searching for an opportunity to use the word to describe myself) nature makes him a social chameleon who is able to quickly adapt to different settings.

Opeyemi recognizes the need to constantly develop oneself in order to stay afloat in a competitive and ever-evolving market like crypto. For this reason, he is always in learning mode, ready to pick up the slightest lesson from every situation. Opeyemi is efficient and likes to deliver all that is required of him in time - he believes that “whatever is worth doing at all is worth doing well.” Hence, you will always find him striving to be better.

Ultimately, Opeyemi is a good writer and an even better person who is trying to shed light on an exciting world phenomenon - cryptocurrency. He goes to bed every day with a smile of satisfaction on his face, knowing that he has done his bit of the holy assignment - spreading the crypto gospel to the rest of the world.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.