Grand Base, a platform for assets tokenization on Coinbase’s layer-2 blockchain, has disclosed a loss of $ 1.7 million due to a private key compromise. The occurrence resulted in a financial loss and a decline in the value of its token by 99% in a single day.

Details of the Grand Base attack

The official social media channel of the Grand Base via their Telegram channel was updated that the breach occurred in the early hours of April 15. The admin posted a statement on the platform warning everyone to avoid interfacing with the hacked contract, demanding its total withdrawal from the affected platform after the security loophole was detected.

PeckShield, a blockchain analysis firm, was the first one to  alert that the problem occurred once the private key had been cracked and helped the hacker to be able to access the trade of the liquidity pools of Grand Base. 

Attackers were able to debit the platform of around $1.7 million worth of token and with in 30 minutes they had converted it to about 527 Ethereum (ETH) and transferred to the unknown wallet.

As the result of the attack, the fluctuations of Grand Base’s native coin become steep, that close to destroying the market value, and it is the representation of how investors lack confidence. Besides, CertiK, an analysis company, has highlighted the scope of attackers in their detail follow-up. 

To exert control over the deployer contracts used by Grand Base is one of the scopes they discovered. They tricked the central bank’s system and gave out an enormous amount of GB tokens without a mandate and further distributed these tokens, inflating the situation.

Impacts of the hack

The Grand Base team that reacted to this event have actively tracked the hacker wallets and are currently talking with centralized exchange via Freezing any funds moved through in order to avoid further spread.

This incident is particularly instructive in the fact that it points to the possible weaknesses of digital asset protocols, thus underlining the necessity of having strong security solutions in place. Investors are recommended to wade cautiously and ensure they have updated information about the security precautions and the operating strength of any cryptographic asset platforms they invest money in.

However, the life of this platform manifested not even within five months prior to this instance, which provided security for the users who deposited their assets as collateral, for flock of liquidity while earning rewards. The hack-attack has left their reputation on the line, and it will definitely be a real challenge for them to retain trust and provide the security to their users.