Innovation is never easy. That said, sometimes it can be that much harder. Such was the case for crypto project Bancor this week, which saw its design decisions and strategy picked apart on social media as it sought to contain the damage from a multimillion-dollar hack.
On Monday, the project announced its app was down for maintenance, and shortly after, it revealed a security breach had taken place. At the time, the project assured no user wallets were compromised.
(The startup has since brought its platform back online.) Then on Tuesday morning, Bancor published details of the breach: a wallet used to upgrade smart contracts was compromised and used to steal 3.2 million of the platform’s own BNT tokens (worth $10 million), 25,000 ETH (about $12.5 million) and 230 million NPXS tokens ($1 million). Perhaps most notably, Bancor said it had frozen BNT tokens to prevent their loss.
Some background: it was Bancor that raised a then-record-breaking $153 million in a token sale, which saw participation from investors like Tim Draper and the investment firm Blockchain Capital. The startup pitched itself as a kind of “decentralized” market maker for smaller cryptocurrencies and crypto-assets, as well as means to create wholly new tokens.
As an early mover in using the initial coin offering (ICO) funding model, Bancor has long been a magnet for critiques. Critics have alleged everything from that the platform is unnecessary to that it doesn’t need a blockchain. Sparking discussion of these topics this time around is a crucial detail above: that Bancor was able to quickly stem losses in the cryptocurrency it created and issued. Read more from coindesk.com…
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