Attack on DEX Maiar causes EGLD to lose 93% of its value

Since its launch in November 2021, the Maiar DEX on the Elrond Blockchain (EGLD) has seen increasing success. Unfortunately, the decentralized exchange just suffered a problem very similar to an (organized?) bearish attack on its EGLD quote. The DEX was suspended purely and simply to avoid the worst.

$5 EGLD

Decentralized exchange Maiar has been “closed” for “scheduled maintenance”, although Elrond’s CEO said on Sunday it was due to “suspicious activity”. Elrond lost more than 7% of its value on Sunday when Maiar, the decentralized exchange deployed on Elrond, underwent maintenance.

During the launch, the decentralized cryptocurrency exchange Maiar did everything possible to attract investors to the blockchain of the Elrond Network project. In particular, it very generously distributed its MEX utility token.

Although the crypto market is not doing very well right now, the DEX Maiar is doing well. But on Monday June 6, 2022, between 1 a.m. and 2 a.m. (French time), the first worrying signs appeared, in particular as reported by Twitter.

Massive sales of hundreds of thousands of dollars in EGLD followed at an alarming rate. Some amounts even exceed one million dollars (including the 2 sales of EGLD of 5 million dollars).

Elrond founder and CEO Beniamin Mincu tweeted on Sunday that his team was investigating Maiar’s “suspicious activity” and would provide an update “soon”. “We are investigating a series of suspicious activity on the DEX Maiar. Everyone is there, on deck. We will make updates as soon as the analysis is clear. »

Speculation is rife, with some Elrond supporters hinting at a potential vulnerability. Elrond promises to notify users as soon as a fix is ​​released.

Before we learn more about this so-called attack, let’s take a look at the effects. The price of EGDL tokens on Maiair dropped: from $75 to $5 in less than an hour, a steep drop of -93%!

Fortunately, no such movement has been seen on other exchanges that list EGLD. For example, on Binance, the Elrond token fell from around $75 to $71 (-5%) over the same period. It must be said that the exchanges were stopped on Maiar in order to avoid a domino effect.

The attacker was able to recover almost 1.6 million EGLD

Speaking of Binance, it seems the “attack” started with funds from the Changpeng Zhao cryptocurrency exchange. According to a Twitter account @Foudres_, smart contracts were deployed and according to him, they would have obtained 1.6 million EGLD.

The drop only lasted a few seconds before the network went into “scheduled maintenance”, which halted all activity. So no, the liquidity didn’t blow away, it was just temporarily removed from Maiar’s mining pool (LP) to preserve user funds.

Unlike CEXs, which can “compensate” for such problems, withdrawing large amounts of liquidity from DEXs often results in an immediate drop in the value of the associated token.

This sudden drop in the price of EGLD reminds many users of the recent collapse of the LUNA cryptocurrency. Indeed, the cryptocurrency that rose to CoinMarketCap’s top 10 lost more than 99.9% of its value in just a few hours, understandably causing anger and frustration in the community.

While the reason for this maintenance is unclear, this issue has absolutely nothing to do with the Terra Luna incident. You can relax, and of course wait for a more detailed report from Benjamin Mincu on his Twitter account.

Maiar was launched late last year to coincide with a $1.29 billion liquidity incentive program for MEX tokens to stimulate activity in new markets. The smart contracts built for Maiar and deployed on Elrond were touted at launch as having undergone “rigorous auditing and formal verification”.

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Attack on DEX Maiar causes EGLD to lose 93% of its value


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