Memecoins bleed after Shiba Inu hack
The main memecoins that make up the top 100 of the cryptocurrency market were painted red after the hack suffered by Shibarium, an Ethereum layer 2 (L2) network developed by the Shiba Inu team.
At the time of publication, 8 of the 10 digital assets with the largest price drops in the last 24 hours are memecoins, as seen in the following image provided by CoinMarketCap:
The price drops reflect that the incident has affected investor confidence in memecoins. This happens because this asset class is already considered risky and, in most cases, does not have a solid fundamental value, as explained in the Criptopedia, educational section of CriptoNoticias.
So, when a project as renowned as Shiba Inu suffers an attack, the perception that these coins are vulnerable to technical failures or manipulations is reinforced.
In these contexts, a kind of “contagion effect” arises because the narrative shifts from speculative enthusiasm to fears of new vulnerabilities.
The fact became public knowledge in the last few hours. It all happened after a user took a flash loan through Shibaswap, the decentralized exchange (DEX) developed by the Shiba Inu team, who temporarily acquired 4.6 million bone (BONE), Shibarium’s governance token.
It is important to explain that a flash loan allows you to order large sums of unsecured cryptocurrency, as long as they are repaid within the same transaction. If they are not returned, the operation is automatically reversed. Although it is a tool designed to provide liquidity or perform quick arbitrages, it has also been used in attacks to manipulate networks and steal funds.
With that voting power, he took control of most validators and approved a “malicious state” on the chain, allowing him to drain funds from the bridge connecting Shibarium to other networks.
The attack is estimated to have resulted in losses of around $2.4 million in shiba inu (SHIB), BONE, and ether (ETH), Ethereum’s native currency.
The Shiba Inu team took action and froze 4.6 million BONE, as well as temporarily pausing staking to regain control of validators, thus preventing further losses. They also stated to make it clear that they no longer support Shibarium because it “does not fully align with the vision of Ryoshi (pseudonym of Shiba Inu’s creator), who values decentralization, true utility, and fairness for all holders.”
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