Hedera Network faces Sophisticated Smart Contract Exploit

Hedera Network faces an ongoing exploit targeting the decompiling process in smart contracts. The decentralized exchange (DEX) SaucerSwap Labs has asked users to withdraw their liquidity.

Hedera Foundation wrote on Twitter;

We’ve noticed network irregularities that are impacting various Hedera dApps and their users. The Foundation is in communication with impacted partners. We’re monitoring and working to help resolve the issue.

Consequently, SaucerSwap Labs, a DEX on the Hedera Network, encouraged users to “withdraw the liquidity” immediately as an alleged ongoing exploit hit the blockchain. The Total Value Locked (TVL), according to DefiLlama, has dropped nearly 25% in 24 hours as of writing.

SaucerSwap Labs wrote on Twitter;

An ongoing exploit have hit the Hedera network this morning. The exploit is targeting the decompiling process in smart contracts. At time of writing attackers have hit Pangolin and HeliSwap pools containing wrapped assets. We are unsure if other HTS tokens are at risk too. We are actively investigating and are in talks with the other dexes on the network and trying to look for ways to mitigate the vulneribility. There have been no reports of SaucerSwap users getting funds stolen yet, but as a precaution we would encourage everyone to withdraw liquidity immediately – safety first.

There have been no reports of SaucerSwap Lab users getting funds stolen yet, but as a precaution, I encourage everyone to withdraw their liquidity immediately – safety first. All Hedera dApps using Hedera Token Service (HTS), like LP tokens or wrapped tokens are affected. The exploit is targeting the decompiling process in smart contracts.

However, bridged tokens have been frozen by Hashport so users can’t bridge to other chains now. Hashport wrote; “Hashport bridge has been temporarily paused as we have noticed some smart contract irregularities on Hedera. While we look into it further, we want to ensure user safety. We thank you for your patience and will provide updates as they come.”

Hashpack Wallet appears not to be affected as it wrote on Twitter; “We have become aware of an ongoing exploit with some DeFi projects on Hedera. The situation is still unfolding but it seems like it has to do with smart contracts and wrapped/bridged assets and possibly liquidity pools on DEXs. We have gotten confirmation from Hedera that wallets are not affected – neither are native tokens simply being held in your wallet. HashportNetwork has frozen bridged assets. It is suggested to remove your tokens from LP’s on tokens back into your wallets – you may need to increase slippage on swaps if you are encountering errors.”

It is currently unclear why Hashport website (hashport.network) is offline. It’s possible that they are performing server maintenance or addressing a security vulnerability, but more information is needed to determine the cause.

Despite the fact that HBAR isn’t exposed directly to the exploit but the tokens built using HTS are — many have claimed the glory days of Hedera are set to end as its claim of being a secure and trusted network is now being questioned.

The persistently negative sentiment surrounding Hedera has resulted in an exodus of users unstaking their HBARs in order to sell them on the open Crypto market. However, Stader labs, the largest staking platform for Hedera, has announced a temporary pause on the unstaking process. This indicates that users won’t be able to withdraw their staked HBAR for some time until the issue is resolved.

DefIn addition, as summarised by the moving averages, HBAR’s technical analysis (TA) indicators also reveal a sell position for the Altcoins, advising a “sell” at level 12 and a “buy” at level 3. In response to this recent HBAR crypto news, the price of Hedera is presently exchanging hands at $0.060, which represents a decrease of 2.5% over the past 24 hours, compared to a drop of 10.71% recorded over the preceding seven days.