This Friday, October 7, a hacker managed to exploit the chain BNB, the token of the Binance exchange. Decentralized finance (DeFi) hacks have become increasingly regular in the cryptocurrency market. However, this time around, the hacker did not steal users’ funds. The hacker has released new BNB tokens, in what is believed to be one of the biggest hacks recorded in crypto to date.
The circulation of BNB
The hack took place directly on the bridge from Binance. The attacker managed to convince the bridge to send him millions of tokens. A bridge is a bridge that allows tokens to be passed from one blockchain to another. The attack happened in two waves, with each transaction carrying 1 million new BNB. Thus, there was the circulation of BNB worth more than 500 million dollars. The BSC channel was quickly put on hiatus by the team before further damage was done and some of the coins the attacker obtained were reportedly frozen. As a result, the hacker ended up with a loot of around $100 million.
Thus, the price of BNB fell after the news broke. Today, the network continues to deal with the aftermath of what could have been a devastating hack. Speculation is now turning to what the hack could mean for the value of BNB, at least in the short term.
A possible consequence on the price of BNB
The price of any digital asset is necessarily affected by the available supply. If a large amount of asset is put into circulation at one time, this can obviously have an impact on the price of that asset. However, in the case of BNB, the exceptional hack was a priori stopped at the right time. The amount the attacker stole was not enough to significantly impact the price of BNB.
The main concern about the price now stems from the level of trust in the network. As has been the case in the past, hacks have generally seen a drastic drop in investor confidence. As a result, some withdrew their funds, but that was not the case with BNB. In the case of Binance, this event highlighted the problem of the decentralization of the blockchain since it can be interrupted due to a hack.
Besides a slight drop in the price of the digital asset since the hack went public, BNB is holding up well. It maintains its value above $270 at the time of writing.
Furthermore, BNB is backed by its fundamental: The largest cryptocurrency exchange in the world. It organizes quarterly burns and the 21st burn should take place sometime in October 2022. Thus, the impact on the price will probably not be significant.
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To the angelism of the intercessors of the current monetary system, I oppose DeFi, digital assets and the metaverse. Lawyer in Luxembourg, I am interested in cryptocurrency investment funds.
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Binance: Millions of new BNBs in circulation
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