A social finance (SocialFi) platform built on Avalanche (<\/span>AVAX<\/span><\/a>) has suffered losses after bad actors targeted a smart contract vulnerability.\u00a0<\/span><\/p>\n Stars Arena allows content creators to monetize their expertise by selling tickets or shares to their followers using AVAX tokens to facilitate the sale.\u00a0<\/span><\/p>\n In a post on social media platform X, cybersecurity firm Peckshield says Stars Arena lost $2.9 million in AVAX after a breach that exploited the platform\u2019s reentrancy issue.\u00a0<\/span><\/p>\n The security flaw enables attackers to drain the funds of a smart contract by <\/span>repeatedly calling the withdraw function before the balance gets updated.<\/span>\u00a0<\/span><\/p>\n Peckshield says the hackers targeted the vulnerability in a bid to sell the tickets at a higher price.<\/span><\/p>\n \u201cOur initial analysis on today\u2019s Stars Arena $2.9 million hack indicates a reentrancy issue on the Stars Arena\u2026 The reentrancy is abused to update the weight when the share\/ticket is issued so that 1 share can be sold at a much higher price ~274,000 AVAX.\u201d<\/span><\/i><\/p>\n Data from Avalanche blockchain tracker Snowtrace <\/span>shows<\/span><\/a> that Stars Arena\u2019s smart contract is left with less than $0.01 worth of AVAX after the exploit.<\/span><\/p>\n In a post on social media platform X, Stars Arena says<\/a> it is working to make every user whole.\u00a0<\/span><\/p>\n \u201cWe are deeply sorry for what happened.\u00a0\u00a0\u00a0\u00a0<\/span><\/i><\/p>\n Our smart contract was exploited and the funds were drained. The site is currently under a DDOS (distributed denial-of-service) attack. We are working on a solution to get everyone\u2019s funds recovered and have the Arena move forward.\u201d<\/span><\/i><\/p>\n Amid criticisms, the SocialFi app, which just launched in late September, says<\/a> it will not cease operations because of the incident.<\/span><\/p>\n \u201cImportant news: we have secured the resources to close the gap caused by the exploit. Additionally, a special white hat development team is coming in to rapidly review the security of the platform.\u00a0 <\/span><\/em><\/p>\n We will re-open the contract with all the funds in full after a full security audit. This will happen very soon. We\u2019re not going anywhere. The Arena marches on.\u201d<\/span><\/em><\/p>\n AVAX is down by 4% over the past 24 hours. The token is currently trading for $10.35.<\/span><\/p>\n Don’t Miss a Beat \u2013 Subscribe<\/a> to get email alerts delivered directly to your inbox <\/span><\/em>
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