A day ago, Avalanche’s newcomer, a socialfi platform named StarsArena (ref link) experienced a significant loss of almost all its locked funds due to a security breach that targeted a smart contract responsible for token security within the social application. The breach resulted in the drainage of approximately $3 million worth of AVAX tokens from Stars Arena, leaving the platform with less than $1 in funds after the attacker’s actions.
The attack happened while one of the Twitter (X) users started raising concerns about the potential security vulnerabilities on the platform but it wasn’t entertained, and the day later, the attack led to the draining of AVAX from the same vulnerability.
StarsArena had only launched a little over a week ago but quickly garnered a devoted following within the Avalanche community. Some users even earned substantial amounts of AVAX tokens through trading fees on the platform, with the platform’s activity contributing to a notable 6% boost in AVAX token prices at one point during the week.
There has been a major security breach with the smart contract.
We’re actively checking the issue.
DO NOT deposit any funds.
Stay tuned for updates.
— Stars Arena (@starsarenacom) October 7, 2023
There has been a rise in the number of SocialFi applications in the recent times, starting with friend.tech that was on the Base blockchain, and it still is one that has the highest market share. Both apps offered users the opportunity to purchase “keys” or “shares” of prominent X users, granting access to exclusive chatrooms with various privileges for the holders. The value of these shares exhibited considerable volatility, leading some users to treat them like tokens and seek profit from price fluctuations.
Stars Arena is a platform where users login with their Twitter account and build a profile where your shares are bought and sold by people who are interested in your profile and the content you make there. The concept began with friend.tech and there are similar platforms built on other chains including Solana, Arbitrum One, and people have been trying out these platforms not just to trade shares and profit off by being early buyers of shares of influencers, but also are trying for any potential airdrops from those platforms.
Update:
Important news: we have secured the resources to close the gap caused by the exploit.
Additionally, a special white hat development team is coming in to rapidly review the security of the platform.
We will re-open the contract with all the funds in full after a full security…
— Stars Arena (@starsarenacom) October 7, 2023
Stars Arena tweeted that they secured the resources to close the gap caused by the exploit.
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