After a private key compromise, Grand Base (GB), a real-world asset tokenization technology that runs on Coinbase’s native layer-2 blockchain, lost $1.7 million.
“On April 15 at 03:01:27 AM +UTC, an exploit happened on our contracts,” wrote an admin in the protocol’s Telegram chat. “For this specific reason, we urge all our community members to stay away from this contract as it is not safe anymore.”
PeckShield, a blockchain analytics company, claims that a $1.7 million worth of tokens were stolen from its liquidity pools as a result of the private key leak. These tokens have now been exchanged for ether on the blockchain and delivered to an external address.The event also caused the native token of the protocol to lose 99% of its value in the last 24 hours.
The Grand Base Telegram admin reiterated that “this token contract is NOT safe anymore and you should NOT swap or interact with it, stay safe. We will update you asap on the next step.”
The hacker appears to have taken control of Grand Base deployer contracts, created an excessive amount of GB tokens without permission, and then withdrawn them, according to a follow-up investigation by blockchain analytics company CertiK.
A subsequent post from Grand Base staff claims that developers have “tracked all the wallets of the hacker” and are awaiting the next move. “We are in talks with CEXs [centralized exchanges] to freeze any funds that he might move,” Grand Base staff added.
Users were not impressed with the news of the Monday hack. “I’m very sorry for everyone involved here,” one user wrote in Grand Base’s Telegram chat. “Please, don’t lose more money here. Abandon this and don’t deposit a single dollar more into this thing, whatever happens.”“There are hidden loopholes in this contract,” another user alleged. “The total balance does not show any changes, and it belongs to hidden loopholes. Do you know if it was intentional by dev or not?” they added. Before the minting attack, Grand Base had a maximum GB token cap of 50 million.
In less than five months, the Grand Base tokenization technology was introduced.In order to mint real assets in the form of ERC-20 tokens, it allowed users to deposit collateral. It also supplied liquidity so that the tokenized assets could earn rewards.