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The increasing tension between Ukraine and Russia has pushed the prices of major crypto assets even lower.
The two leading cryptocurrencies, Bitcoin and Ether, suffered massive dips on Tuesday morning, touching multi-week lows. The rest of the crypto market has endured the same fate, with tokens like Fantom and XRP recording losses upwards of 6.30% in the last 24 hours. Market data further shows that Polygon’s MATIC is one of the hardest-hit crypto. The token has shed over 20% of its value in the last seven days and is currently hovering below $1.45.
Meanwhile, the Polygon network is lucky to have avoided an exploit on a “consensus bypass” bug that could have jeopardized billions in user funds. Here are the details and a review of MATIC’s price action:
Hacker collects $75,000 bounty following the discovery of bug on Polygon
A little over a month ago, a white hat hacker Niv Yehezkel identified a ‘high severity’ bug on the Polygon network. Reports suggest that an actor with malicious intentions could have exploited the bug to drain all user holdings from the deposit manager contract.
Fortunately, the bug was fixed, and the smart contract bug bounty platform Immunefi confirmed that the bug was no longer exploitable. In a Monday report focusing on the Consensus Bypass Bugfix, Immunefi said that an attacker would have gained the capability to implement a Denial-of-Service attack (DoS) and conduct limitless withdrawals.
The bug bounty platform clarified on the complexity of the bug, further adding that three requirements had to be met to successfully carry out such an attack.
“For the attacker to have exploited this vulnerability, specific market conditions would have had to have been met. For example, a validator spot had to have been open, and the capital requirements were high […] The amount to pay the miners directly to stay in the validator spot using flashbots was also high. Additionally, the checkpoint time for the Polygon network happens every 30–45 minutes, and the attacker would have needed to maintain the validator spot for a long time, thus increasing the costs of the attack due to time requirements.”
All for the safety of user funds
Immunefi revealed that ethical hackers have saved more than $20 billion in possible losses. The hackers who have helped identify and report these potential vulnerabilities have in turn received more than $10 million in bounty payments. Projects listed on Immunefi have an aggregate of $110 million in bounties available.
A number of chains have already been spending massive amounts on security hackers for preventative action against exploits.
Last October, Polygon paid $2 million to a bug bounty hunter who identified another serious hack that could have caused $850 million in losses. Towards the end of December, Polygon suffered an attack that resulted in the loss of $1.6 million worth of MATIC tokens but salvaged as much as $20 million from getting stolen – also saved by the efforts of white hat hackers.
Protecting user holdings in the network is even more crucial in Polygon’s case, considering it is one of the most widely used Ethereum sidechains. It holds up to $3.99 billion in TVL, beating out L2 competitors such as Arbitrum.
Besides Polygon, Cardano has also ramped up efforts in identifying network vulnerabilities. It recently invited white hat hackers to penetrate-test the network, with the rewards doubled for a promotion period spanning 14th February and 25th March. The increasing sum set aside for bounty rewards indicates that the demand for white hat hackers is growing amid the rise of blockchain protocols.
Polygon (MATIC) market performance
The MATIC/USD trading chart shows that the token has been downtrend since peaking at $1.87 last Wednesday. The pair has plunged over 31.75% over the last six days to $1.42 as of writing.
MATIC lost support at $1.60 over the weekend before briefly reclaiming the level during yesterday’s trading session. The upsurge was, however, short-lived as the market retraced. The token plunged to a four-week low of $1.36 earlier today but has since climbed back above $1.40. Market data shows MATIC/USD has fallen 4.40% on the day, bringing the 7-day losses to 21.45%. Only Cardano’s ADA has seen more losses during this period than MATIC among the top 15 crypto-assets by market capital.
To learn more about this token visit our Investing in Polygon guide.
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Sam is a financial content specialist with a keen interest in the blockchain space. He has worked with several firms and media outlets in the Finance and Cybersecurity fields.