Ethscriptions protocol suffers smart contract exploit

TL;DR Breakdown

  • Ethscriptions protocol has suffered a massive setback after its marketplace was hacked.
  • Addressing security concerns for a relaunched marketplace.

Description

The Ethsubscriptions protocol, a groundbreaking initiative allowing users to create and share digital objects on the Ethereum blockchain, has encountered a significant setback due to a recent hack on its main marketplace. Launched just last month by Tom Lehman, co-founder and former CEO of Genius.com, Ethscriptions is a novel concept that leverages transaction “calldata” to … Read more

The Ethsubscriptions protocol, a groundbreaking initiative allowing users to create and share digital objects on the Ethereum blockchain, has encountered a significant setback due to a recent hack on its main marketplace. Launched just last month by Tom Lehman, co-founder and former CEO of Genius.com, Ethscriptions is a novel concept that leverages transaction “calldata” to record non-financial data on the Ethereum network.

Hackers stole listed Ethscriptions on the protocol

While the Ethsubscriptions protocol itself and other applications using the technology remain unaffected, the marketplace on Ethscriptions.com suffered a security breach resulting in the theft of a considerable number of listed Ethscriptions. Lehman revealed on Twitter that approximately 202 Ethscriptions were stolen from around 123 individual addresses in the exploit. The exact value lost remains unclear, but data from the NFT marketplace OpenSea indicates that some Ethscriptions have sold for as much as 5 Ethereum, equivalent to approximately $9,600, within the past month.

This incident is particularly distressing for Lehman, who had intended for the marketplace to serve as an example for other platforms supporting Ethscriptions. Unfortunately, the security breach has tarnished this vision, and Lehman has taken responsibility for the failure. The exploit was traced back to a smart contract developed by Lehman and Indelible Labs co-founder Michael Hirsch, where a code snippet allowed the unauthorized withdrawal of Ethscriptions from the marketplace.

Lehman acknowledged the challenges of handling a new protocol, explaining that while it offers cost-saving benefits by limiting the use of smart contract storage, it also requires more strategic approaches for cases like marketplaces. The incident revealed the necessity of providing smart contracts with sufficient information or designing them to operate without such data.

Despite the setback, Lehman remains determined to relaunch the Ethscriptions.com marketplace once the necessary changes are implemented to enhance the protocol’s security. He has also been in contact with those impacted by the exploit, commending them as “the earliest adopters” of the Ethsubscriptions protocol on Twitter.

Addressing security concerns for a relaunched marketplace

Ethsubscriptions differ significantly from traditional NFTs (Non-Fungible Tokens) as they are stored in transaction-level data instead of being issued as tokens on Ethereum’s ERC-721 token standard through smart contracts. To date, approximately 474,000 Ethscriptions have been created, as reported by a Dune Analytics dashboard.

The emergence of the Ethsubscriptions protocol comes amid the rising popularity of Ordinals, a system utilized for creating NFT-like assets on the Bitcoin network. This surge in experimentation with cryptocurrency’s oldest coin has sparked renewed interest in exploring unique use cases. Since drawing attention to the exploit on July 14, the Ethscriptions.com marketplace continues to carry a warning message urging users to withdraw their Ethscriptions and refrain from creating new listings until the necessary security measures are in place.

The Ethsubscriptions protocol has experienced a setback with the recent hacking incident on its marketplace. However, creator Tom Lehman is committed to addressing the security issues and relaunching the platform, aiming to guide other marketplaces seeking to support Ethscriptions in the future. As the Ethsubscriptions ecosystem continues to evolve, the incident serves as a crucial lesson in navigating the complexities of developing innovative protocols and ensuring robust security measures for a seamless user experience.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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