ZKsync Crashes Following $5 Million Token Heist

The ZKsync security team has identified a compromise of the administrative account through which ~$5M worth of ZK tokens were intercepted — these were unclaimed balances after airdrop. Against the backdrop of the incident, the ZK exchange rate sagged by 17% at the moment, but the price soon partially recovered the fall. ”All user funds are safe and have never been compromised. The ZKsync protocol and the ZK token smart contract remain secure, and the continued security of ZK is not a concern,” the project representatives wrote. A bit later, the researchers found out that the account in question (0x842822c797049269A3c29464221995C56da5587D) controlled the three contracts responsible for the distribution of airdrop. According to their calculations, the transaction increased the number of tokens in circulation by ~0.45%. The experts emphasized that the incident affected ”exclusively contracts for airdrop distribution; all tokens to be issued have already been issued.” Thus, re-exploitation of the vulnerability is impossible; The attacker still holds the bulk of the funds at this address . Lastly, the project reported collaborating with experts from the Security Alliance and encouraged the attacker to reach out to return the funds to avoid legal repercussions. ZKsync gave away 3.6 billion ZK tokens during airdrop The ZKsync Association hold a one-off distribution of 3.6 billion ZK tokens among early adopters of the network next week. Matter Labs founder and CEO Alex Gluchowski told The Block . The number of coins allocated for airdrop represents 17.5% of the total issuance of 21 billion. Users were able to request their tokens until January 3, 2025. Claim were available starting June 24. 89% of the coins went to users who made transactions through ZKsync. 11% will be distributed among developers and other community members who have contributed to the ecosystem; A total of 695,232 wallets were shortlisted to receive airdrop. The snapshot was taken on March 24, 2024 to mark the one-year anniversary of the launch of the ZKsync Era core network. The rest of the ZK tokens will be distributed over time through the ZKsync Foundation`s ecosystem initiatives and through the ZK Nation governance model. Specifically, investors will receive 17.2% and the Matter Labs development team will receive 16.1%. Their tokens will be locked for a year, and then they will be gradually unfrozen over three years - from June 2025 to June 2028. Airdrop was based on a points system. Users received them for interacting with smart contracts in ZKsync Era, contributing liquidity to DeFi protocols, trading ERC-20 tokens, and being active in ZKsync Lite. The distributed tokens hadn`t any lock-in periods and will become ”fully liquid from day one”. One address was able to receive a maximum of 100,000 ZK tokens. This was explained by the fact that ”the team is focused on the community as a whole, not on the creation of individual whales”; The developers have also tried to filter out bot addresses from airdrop as much as possible. Matter Labs reduced the number of ZKsync developers by 16% Alex Gluchowski, CEO of Matter Labs, the company behind the ZKsync protocol, announced a 16% reduction in staff. The CEO said the company has taken a number of steps to adapt ”to other types of technology and support” that the L2 project now requires. ”We did extensive organizational planning. It became clear that the talent and roles we have today were not fully aligned with our needs,” Gluchowski said. According to the company`s LinkedIn profile, it has up to 200 employees. Thus, about 30 people will fall under layoffs. Between 2021 and 2022, ZKsync raised $450 million in investments.

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Source: Coinpaper