Crypto Music Service Audius Hacked; Reports $1.08 Million Loss
Key Points:
- Crypto music service Audius was hacked on 24 July, with the hacker running away with $1 million.
- The cybercriminal successfully siphoned funds from the community treasury by assigning himself as the only guardian of a governance contract.
- Post the attack, Audius reinstated the AUDIO token and smart contract functionality.
Crypto music service Audius saw one of the darkest days since its inception after a malicious hacker siphoned $6 million from the community treasury. The perpetrator created a spiteful proposal that requested the transfer of around 18 million AUDIO tokens from the community treasury. It appears that this was approved by the Audius community.
According to a Twitter user, the hacker assigned himself as the only guardian of the contract by naming the smart contract function “initialize()”. Soon after the service was hacked, Audius paused AUDIO tokens and smart contracts to ensure a further loss of funds. As things stand, both the functionalities are up and running again. Audius has also confirmed that the funds in the foundation and community treasury are safe.
Audius is expected to release a full statement after it gets to the bottom of the issue this week.
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Slippage in AUDIO price after hacker shenanigans
The hacker swept away around 18 million tokens worth $6 million and sold them for $1.08 million on the decentralized exchange Uniswap. This has caused slippage in AUDIO token price. Are you wondering what slippage means?
Slippage is essentially the difference between the expected price of a token and the price at the time of order execution. It can be expressed in terms of a dollar amount or percentage. One investor even hinted toward a buyback to block a selloff which would further drop the price. Another investor was more stern, giving Audius an ultimatum; recover or they are out.
So what went wrong? Peckshield, a blockchain security company said that inconsistency in the storage layout could be the epicenter of the issue, which Audius has now fixed.
Is Audius cutting out labels?
Audius was primarily established to connect fans to their music artists without an intermediary. In this case, a label. It was conceptualized to become a blockchain version of SoundCloud. On Audius, artists can create immutable audio tracks that can be streamed free of charge. In addition, artists have complete control over how they wish to monetize what they produce and receive 90% of the revenue. The remainder 10% is distributed to node operators.
What are your thoughts on this entire subject? Leave your comments below and let us know.
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