Decentralized finance (DeFi) protocol Nexera has taken decisive action by burning 32.5 million NXRA tokens that were stolen in a recent hack. The move, confirmed by blockchain security firm PeckShieldAlert on Thursday, permanently removes these tokens from circulation.
In cryptocurrency, "burning" refers to the process of permanently eliminating a specific number of tokens from the market. This strategy is often employed to reduce the total supply of a cryptocurrency, potentially increasing the value of the remaining tokens.
Nexera Clarifies Hack Impact on Smart Contracts
Following the hack, Nexera conducted a technical investigation and determined that their smart contracts were not compromised. To prevent further exploitation, Nexera swiftly froze the remaining 32.5 million NXRA tokens in the attacker’s wallet, with only $440,000 worth of the stolen tokens being effectively compromised. The project stated that the NXRA burn ensures these tokens cannot be used, traded, or circulated within the market.
The security breach occurred on August 7, resulting in the theft of $1.5 million worth of digital assets, including NXRA tokens. The coordinated attack targeted multiple projects and protocols within the DeFi space. The hacker managed to steal 47 million NXRA tokens, valued at approximately $1.76 million, and began liquidating a portion of them for Ether. Some of the stolen funds were also transferred to the BNB Chain.
Despite the breach, Nexera decided not to issue a new NXRA token, maintaining the existing token address. The attacker had interacted with exploit-related addresses on exchanges like KuCoin and MEXC, prompting these platforms to suspend deposits, withdrawals, and trading of NXRA tokens. Other exchanges were also notified and urged to take similar precautions.
Ongoing Crypto Security Concerns
This incident is part of a troubling trend in the cryptocurrency world, following a similar breach at WazirX, an Indian cryptocurrency exchange, which lost over $230 million to a hacker three weeks prior. This was the second-largest crypto hack of 2024, underscoring the sector's vulnerabilities and the urgent need for robust security measures.
In total, the crypto sector faced significant losses in July, with hackers stealing approximately $266 million through 16 separate breaches. Major victims included algorithmic protocol Compound Finance ($24 million), bridging protocol Li.Fi ($10 million), decentralized AI protocol Bittensor, and liquidity provider Rho Markets, each losing $8 million. In many cases, the stolen funds were moved to the cryptocurrency mixer Tornado Cash, a technique used by hackers to obscure the origin of the funds and evade detection.
In contrast to July, June saw lower losses of $176 million spread across approximately 20 incidents, highlighting a sharp increase in the value of stolen assets in just one month.
Nexera's proactive measures to address the recent hack demonstrate the ongoing efforts required to safeguard digital assets in the ever-evolving landscape of decentralized finance.
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