Cross-chain bridge provider pNetwork has triggered damage control after its attempt to resolve a “misconfiguration” in its code has apparently led to a $1 billion hack. On November 3, someone minted $1 billion worth of pGALA tokens and offloaded them to PancakeSwap, BNB Chain’s main exchange, according to transaction data from BSC Scan. The price of pGALA has dropped by 94%.
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Misunderstanding
pGALA is a BNB Chain-compatible version of GALA, the Ethereum-based utility token of web 3.0 gaming network Gala Games. But pNetwork said the disaster is a big misunderstanding. Is it over there tweeted which intentionally minted 28.4 billion pGALA tokens to drain the PancakeSwap pool and thus protect token owners after a “misconfiguration” was identified in their bridging contracts. “All GALA tokens on Ethereum, as well as the underlying collateral on the bridge, are SAFE,” pNetwork said. “We regret any inconvenience this may have caused the community and will strive to avoid these issues in the future.”
Unhappy
Gala Games is not happy with the way pNetwork handled the incident: “We did not participate in this process,” Jason Brink, president of blockchain at Gala Games, told The Defiant. “They operate completely independently of us…According to their tweets, they were doing this in an attempt to cover the pool for when they redistributed the contract.” Brink said pNetwork did not consult with its team before minting the 28.4 billion GALA tokens.
unlocked tokens
The team will now create a new pGALA token and launch it into wallets that held the coins before the incident. pNetwork has also taken a snapshot of the pGALA pool on PancakeSwap and will return the BNB and pGALA to the liquidity providers. pNetwork issues the pGALA on the BNB Chain when a user locks their GALA token in their bridge contract. The pGALA tokens are then destroyed when the user wants to migrate their assets back to the Gala Network, which unlocks their GALA tokens on Ethereum. Gala’s Brink said the episode exposes the vulnerabilities of blockchain-based businesses. “One of the downsides of cryptocurrencies and web 3.0 in general is that people can activate these external services that you have little or no control over,” he said. “This is both a blessing and a curse.”
GALA token retreats
The Ethereum-based GALA token lost up to a quarter of its value shortly after the incident before recovering to a 12.5% decline. pNetwork warned that the new pGALA is not yet active and that scammers may try to take advantage of the incident by issuing fake tokens. It also urged opportunists not to buy old, devalued pGALA tokens from PancakeSwap in an attempt to arbitrage with GALA. “Newly purchased pGALA on Pancakeswap is not redeemable for pGALA at 1:1,” pNetwork said. “We are trying to drain the pGALA PancakeSwap pool, so please STOP buying as this will only slow down the recovery process for everyone…” PancakeSwap is DEX’s #2 in 24-hour turnover at $296 million, according to CoinGecko. The exchange accounts for 54% of BNB Chain’s $6 billion Total Blocked Value (TVL). *Translated with permission from The Defiant.
Warning: The text presented in this column does not necessarily reflect the opinion of CriptoFácil. Also read: Token created on the Near network loses 95% in value after hacker attack Read also: MATIC price rises 17% after whales break transaction record
