Avalanche-based Stars Arena Losses $3M In An Attack Few Days After Launch

TL;DR

• Avalanche-based social app Stars Arena lost $3 million in a hack a week after its launch.

• The platform has lost nearly all its total value locked (TVL) in the attack.

Stars Arena Makes A Bumpy Start

Avalanche upstart Stars Arena was drained of roughly all its locked funds over the weekend. This latest development comes as the attacker exploited a smart contract that helped secure tokens on the application. 

The attacker stole $3 million worth of Avalanche’s AVAX tokens, leaving Stars Arena with just $1 in its vault. 

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

The Stars Arena team confirmed the attack in a tweet during the weekend. The hack came barely a month after Stars Arena’s launch. The social platform quickly gained a cult following within the Avalanche community. Its launch also helped push AVAX’s price higher over the last seven days. 

Stars Arena Secures Funding To Cover Hole

The team announced over the weekend that it had secured funding to cover the $3 million hole left in its treasury following the hack. Stars Arena will also reopen the smart contract once a full security audit has taken place. 

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

The Stars Arena team assured its community members that security will be its primary focus moving forward. 

Many consider Stars Arena to be a clone of Friend.Tech, a social app on the Ethereum network that recorded over 100,000 users within weeks of its release two months ago. 

Stars Arena and Friend.Tech allow users to buy keys or shares of popular X users in turn for access to a closed chatroom, where they get to enjoy certain privileges. However, similar to cryptocurrencies, the values of the shares are very volatile. 

Stars Arena has already received glowing reviews from some Ava Labs employees, including founder Emin Gün Sirer. When notified of the potential security risk on Friday, Sirer commented that the flaw had already been fixed. 

The cryptocurrency market continues to lose billions of dollars to hacks and scams. Recent data obtained has shown that more than $1.3 billion worth of cryptocurrencies have been lost to hacks and exploits since the start of the year.