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Wallet vulnerability leads to network outage, IOTA price still up over 10% compared to last month

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Wallet vulnerability leads to network outage, IOTA price still up over 10% compared to last month

Despite the fact that the IOTA network has been shut down for nearly two weeks due to a vulnerability in the Trinity wallet, the price of IOTA has still risen by over 12% in the past 30 days. This price reaction demonstrates the unpredictable nature of the cryptocurrency market.

IOTA Network Shutdown

IOTA is an ambitious project aimed at providing high settlement efficiency micro-payment services for devices in the Internet of Things (IoT) ecosystem. However, the network system has been quite unstable in the past two years. Following a 15-hour network shutdown in December last year, IOTA made headlines earlier this month when the Trinity wallet was hacked due to a major vulnerability. On February 13th, the IOTA Foundation shut down the main node called the Coordinator, causing the entire IOTA network to be suspended for the past two weeks. It was reported that this vulnerability resulted in approximately $1.2 million in losses for IOTA users, and the team plans to restart the network by March 2nd.

For a decentralized system, a network shutdown is a serious matter. Besides users being unable to transfer assets, it also means that users' cryptocurrency assets are exposed to danger and could be at risk of being lost at any time. However, this incident does not seem to have affected users' trust in the network.

Since the network shutdown, the token's price has dropped by about 20%, but it has only decreased by 10% since the beginning of this month.

Calm Before the Storm?

It is worth noting that the current situation for IOTA may just be the calm before the storm. While users can trade tokens held on exchanges, most tokens are still locked in wallets within the network, unable to be transferred due to the network shutdown. Once the network is reactivated, a large-scale selloff triggered by a rush of funds fleeing is still a possibility.

However, according to a survey conducted by Julian Hosp, co-founder of Cake DeFi and I-Unlimited, most IOTA holders seem willing to continue holding their tokens after the network goes live on March 4th. The survey results show that out of 1600 participants, only 32.5% indicated they plan to sell IOTA, while the rest stated they would continue to hold.

Whether the survey results reflect the actual situation remains to be seen.

Related Reading

  • IOTA Wallet Vulnerability Exposes $1.6 Million Theft, Mainnet Temporarily Halted
  • IOTA to Release Experimental Applications for Digital Identity in First Half of 2020

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