Meme Coins Plunge As SHIB, DOGE, And PEPE Plummet After Shibarium Hack
The meme coins sector’s market capitalization plunged 7% in the last 24 hours as leaders Dogecoin (DOGE), Shiba Inu (SHIB) and Pepe (PEPE) all plummeted following a multi-million-dollar hack on the Shibarium network.
Leader DOGE took the biggest hit among the top three meme coins, according to CoinGecko.
Top five largest meme coins by market cap (Source: CoinGecko)
After a 7.7% drop, DOGE trades at $0.2652 as of 8:12 a.m. EST, while SHIB and PEPE dropped 5.4% and 6.3%, respectively.
Almost all of the other top ten largest meme coins saw their prices fall, with only MemeCore (M) and Pump.fun (PUMP) recording gains.
Shibarium Bridge Hit With A Flash Loan Attack
The drop in meme coin prices comes after Shiba Inu’s layer-2 blockchain network, Shibarium, was hit with a flash loan attack.
The attacker borrowed 4.6 million BONE, which is the governance token for the Shiba Inu ecosystem, through a flash loan. This enabled the exploiter to gain control of the majority of validator keys.
Those keys act as gatekeepers within the Shibarium network, confirm transactions and ensure security.
With that control, the attacker was able to game the system into approving multiple unauthorized transactions, stealing $2.4 million from the bridge that connects Shibarium with the Ethereum network.
But the Shibarium team prevented a much larger attack thanks to the tokens being tied to validator1 and were still locked under the network’s staking rules.
Despite being able to prevent a much more serious attack, the incident still spooked investors.
In an update regarding the incident, the Shibarium team said that the breach was a sophisticated attack that they speculated was “planned for months.”
After the attack, the team immediately paused stake/unstake functionality as a safety precaution. They also moved stake manager funds into a hardware wallet that is secured through multi-signature signing.
Both of these moves are temporary until the full extent of the attack is determined, the team said, adding that they are now in “damage control mode” and that hey still don’t know whether the attack was the result of a compromised server or a developer machine.
Authorities have also been contacted, the team said, adding that they are open to communicating with the exploiter “in good faith.”
If the attacker returns the funds, the Shibarium team said they will not press any charges and may even consider offering the exploiter a “small bounty” for identifying the security bug.
Once the team has verified validator control integrity and secure key transfers have been completed, the stake manager funds “will be restored in full.”
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