TL; DR
Full story
We just heard something terrible.
It’s called an ‘infinite coin attack’.
This is how it works:
You know how some crypto projects have limited offerings?
Take BTC for example: only 21 million BTC has ever been created, and never will be.
That’s super important for the tokenomics of the project.
(That is, the way an investor can measure value by analyzing supply and demand).
Look, far from it we are not developers, but what we know is that every time tokens are minted, somewhere in a project’s smart contract code lies the specific number for the total supply.
But what happens if a hacker can change that number? What about if they changed that number from 10 million to 10 billion (for example)?
Then when they mint new tokens, they can mint an infinite number of coins.
It may be hard to tell at first. If the project has significant liquidity, there is a good chance that the hacker can sell some tokens unnoticed.
…until they get caught.
Which will then likely drive down the price of the existing tokens and ruin the party for everyone good actors who invested because they believed in the project.
This is exactly what happened a while ago the paid network hack.
The way for companies to overcome the infinite coin hack is through frequent smart contract audits – and for investors, it’s always best to find out when the most recent smart contract audit has been completed before investing heavily in a project.
Stay safe out there!