As a result, the price of the token dropped by 95% and with this development, other team members have started urging users to withdraw all their funds and stay on the lookout for further updates.
Users are also urged to exit SharedStake’s liquidity mining contracts and the Saddle pool ETH-vETH2 as the team continues to assess and address the situation.
Meanwhile, the protocol’s team said it has already identified the developer that was responsible for the token price exploit.
Even before this exploit, a number of people have already sounded the alarm, expressing concerns and raising red flags about the protocol because of their suspicions brought about by the anonymity of its developers and lack of transparency on the project’s website.
Moreover, the protocol’s Twitter account was also suspended, further compounding the distrust that some people already had for the staking platform.
Even if the yield-bearing token vETH2 which carries a 1:1 price ratio to ethereum remains safe, the incident that involved SharedStake caused fear and speculations that it may also lead to vETH2 losing peg.
With yet another exploit resulting in losses that are yet to be determined, concerns about the rise of crypto exit scams and DeFi rug pulls are rising once again.
Last week, the ecosystem already took a beating from similar incidents, with the StakeHound, the second-largest ETH2 staking protocol pausing all transfers for the tokenized variant of staked ethereum after losing its private keys.
Impossible Finance protocol on the Binance Smart Chain, on the other hand, was also exploited in a flash loan attack, losing $500,000 in the process.
Image courtesy of Cointelegraph News/YouTube
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