The LSDFi protocol unshETH officially responded to last night’s security incident on Twitter at dawn this morning. The project said that around 22:00 on May 31, one of the implementation private keys of the unshETH contract was leaked.
At approximately 14:00 UTC (6 hrs ago), one of the deployer private keys for unshETH contracts was compromised.
Out of an abundance of caution, we emergency paused withdrawals on unshETH Ether. Given our security model, unshETH Ether deposits ($35m tvl) are secured with…
— unshETH (@unsheth_xyz) May 31, 2023
Out of an abundance of caution, the official urgently suspended unshETH’s ETH withdrawals. According to the security model, unshETH’s ETH deposits (TVL up to $35 million) are protected by multi-signatures and time-locks, so there is no risk.
Additionally, several backend agreement contracts (liquidity mining pools, cross-chain bridges, etc.) have been hacked and are collaborating with white hat security experts from Coinbase, Stargate, Paladin Blockchain Security, Github, and ogle for the safety of user funds and Impact Area is expected to be restricted.
At the same time, the official contacted the hacker to try to negotiate the return of money and contract ownership to limit the impact on existing users.
Earlier, several KOLs tweeted that the protocol’s vault was suspected of having security issues and reminded users to move funds out as soon as possible.
The reason is that the contract owner has been tampered with, and the project official has been informed, but this official has yet to have an official response. However, the official said in Discord that emergency measures had been activated and the Ethereum funds involved are safe.
On-chain information shows that the contract owner’s rights were transferred two hours ago and are now moved to an unknown address 0xb815114245B6E0f7d31910ae87c58b35C7D39827.
On May 27, the LSDFi protocol hit a significant milestone seeing an unprecedented $25 million inflow in just one day.
Unsheth, a real-world commodity-backed synthetic asset offering, holds 12.9% of LSDFi TVL. Its inclusion in the LSDFi protocol underscores the need for diversified investment opportunities in the DeFi space.
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