Crisis at Stars Arena: $3 Million Exploit Shakes Avalanche-Based Social Media Platform

Crisis at Stars Arena: $3 Million Exploit Shakes Avalanche-Based Social Media Platform

Crypto News – Just a little over a week after its initial launch, Stars Arena, a decentralized social media application based on Avalanche, reported a significant security breach involving its smart contract.

In a post on Oct. 7, shared on platform X, the Stars Arena team promptly informed users about the exploit, strongly advising against depositing any funds into the platform.

“Our smart contract fell victim to an exploit, resulting in a loss of funds. The platform is currently experiencing a DDOS attack. We are actively working on a resolution to recover all funds and propel Arena’s operations forward,” stated the team in a subsequent update.

Blockchain security firm SlowMist calculated that the hacker had stolen 266,103 AVAX tokens, valued at nearly $3 million at the time of the exploit.

Stars Arena, a derivative of the popular social media protocol Friend.tech, allows users to trade social tokens linked to X (previously known as Twitter) accounts. Similar to Friend.tech, Stars Arena gained rapid popularity in the days following its late September launch, amassing millions of dollars in value.

On Oct. 5, a user on platform X, “liletch.eth,” claimed to have identified an exploit in Stars Arena, resulting in an alleged drain of $1.1 million. Initially, many users dismissed the post as “FUD.” However, a few hours later, Stars Arena declared that the exploit had been rectified.

Subsequently, as blockchain security firms examined the contract and validated liletch.eth’s discoveries, the Stars Arena team altered their stance on the matter.

During an X Spaces session, the team acknowledged the exploit, expressed their apologies, and proposed solutions to progress from this point.

Despite the breach, the team still enjoys support from various notable figures within the cryptocurrency community, including Ava Labs founder Emin Gün Sirer.

“Stars Arena remains a lucrative service generating revenue. The sum lost, $3 million, is something that Stars Arena can recuperate in approximately 10 days or so. In the worst-case scenario, the team could secure a $3 million loan and repay it with interest,” remarked Gün Sirer.