What to know:
- The Sandbox’s SAND cross-chain contract on Base was exploited, allowing attackers to mint tokens without collateral.
- Nearly $49 billion worth of SAND was generated, but the actual stolen amount was far lower.
- About 14.75 million SAND, worth roughly $675,000, was reportedly stolen, with around 79.74 ETH withdrawn.
The Sandbox hack raised a lot of security issues due to a hack of the SAND cross-chain OFT contract by The Sandbox on the Base blockchain, giving attackers the ability to mint tokens infinitely without any collateral at all.
According to the information on the blockchain, the hack had been ongoing, with over 400 transactions creating nearly $49 billion in tokens. Still, the number is related to the value of tokens generated, rather than the amount stolen from the project.
How the Sandbox Hack Happened
As per a security firm Blockaid, the hacker compromised LayerZero permissions related to SAND’s OFT on the Base blockchain. The hacker exploited the `approveAndCall` function to circumvent the usual checks and create new SAND without any backing.
At some point, 500 million SAND had already been minted, amounting to nearly 17% of the token’s total 3 billion supply.
PeckShield further reported that a total of about 14.9 billion SAND had been created in two wallet addresses involved in the hack. However, as reported by Blockaid, nearly $49 billion worth of SAND had been minted in over 400 transactions.
The magnitude of the Sandbox hack alarmed people over the possible effect on the SAND market from the freshly minted tokens.
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Sandbox Hack Losses Remain Limited
The mentioned $49 billion cannot be considered the amount that was stolen by the hacker. The number corresponds to the market value of the created tokens.
It is impossible to sell the tokens for this amount because there is no sufficient collateral for the creation of such tokens. In case of sale, the price of SAND would decrease drastically.
The amount stolen turned out to be much lower. According to the reports, about 14.75 million SAND, or almost $675,000 worth of tokens, have been stolen by the hackers. Approximately 79.74 ETH was withdrawn from the stolen amount.
Exchanges Respond to the Sandbox Hack
The abnormality was immediately addressed by some major exchanges. Bithumb blocked the deposit and withdrawal of SAND tokens, whereas Upbit warned investors of some strange on-chain activity.
Several security firms such as CertiK also reported this security flaw while investigations were still ongoing.
The Sandbox stated that the cross-chain bridge of the SAND token on Base and BNB Smart Chain had been fixed.
The project reported that the effect was below 0.01% of the entire SAND supply and revealed that Ethereum and Polygon were unaffected.
The team also mentioned that user wallets were not compromised, and SAND locked up on Ethereum was not at risk. The project has halted the bridge functions on Base and BSC and warned users from purchasing, selling, and trading SAND on these networks.
However, amidst the Sandbox hack, SAND price continued to surge by 4.76%, hitting $0.04737, with trading volume up by over 400%.
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This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
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