DEFI

Paid Network hacked, illicitly minted tens of millions of dollars worth of tokens, PAID price crashes 80%

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Paid Network hacked, illicitly minted tens of millions of dollars worth of tokens, PAID price crashes 80%

The token contract of the DeFi project Paid Network was exploited, with attackers creating nearly 60 million unauthorized PAID tokens, successfully selling 2.5 million of them, and making profits of almost 3 million USD.

Minting Attack Nets Hacker $3 Million Profit

Around 2 a.m. today, an unknown hacker exploited PAID Network's token minting feature to create 59.4 million PAID tokens, valued at $166 million during the attack. Shortly after, the hacker began dumping the illegally created tokens on Uniswap, managing to sell around 2.5 million PAID tokens within an hour, making a profit of nearly 2000 ETH (equivalent to $3 million).

The influx of illicit tokens flooded the market, causing the price of PAID tokens to plummet from $2.80 to $0.40, a drop of over 80%. The hacker still holds over 56 million PAID tokens in their wallet, worth approximately $24 million.

Source: Coingecko

Attack from Within the Team?

To prevent further losses, Paid Network announced the temporary withdrawal of liquidity about an hour after the attack and plans to create a new smart contract to recover the original tokens. Additionally, Paid Network has promised to release a detailed report on this attack soon.

While the team claims that the incident was not caused by insiders, the root cause of the attack was the transfer of administrative permissions to the attacker by the contract deployer, allowing the attacker the authority to mint tokens. As a result, many prominent figures in the community have questioned the likelihood that this attack originated from within the team. The Block researcher Igor Igamberdiev stated:

"This looks like a very casual rug pull."

Yearn core developer Banteg also remarked,

"I don't know what Paid is, but it seems to me like one founder drained another."