ETHW price tanks as Ethereum PoW network is hit by second exploit
The price of ethpow (ETHW), a hard fork of Ethereum (ETH), that is supported by proof-of-work (PoW) miners has declined by more than 20% as the PoW network was hit by a replay exploit in just a matter of days.
After several years of anticipation, the long awaited Ethereum update, known as The Merge, took place on 15 September to transform the underlying use of the token’s technology to a proof-of-stake (PoS) consensus mechanism.
The upgrade went through successfully without any reported hiccups and the price of Ethereum rose briefly afterwards, but this was relatively short lived.
The day after The Merge, the ETHW network suffered a block attack on 16 September, which saw the price of ETHW decline by more than 20%.
Security firm highlights ‘replay attack’
Blockchain security firm BlockSec was the first to inform users of the ‘replay attack’ that took place, stating via Twitter that the cause of the hack on 16 September was linked with the bridge not being able to correctly verify the actual chainID of the cross-chain message.
The replay exploit confirmed by BlockSec refers to the same transaction that was duplicated on both Ethereum PoW and PoS chains, which allowed hackers attackers to trick the mechanism into releasing tokens from one chain when the transaction had already been executed on another.
1/ Alert | BlockSec detected that exploiters are replaying the message (calldata) of the PoS chain on @EthereumPow. The root cause of the exploitation is that the bridge doesn't correctly verify the actual chainid (which is maintained by itself) of the cross-chain message.
— BlockSec (@BlockSecTeam) September 18, 2022
Further analysis showed that the hacker managed to get away with 200 ETHW, which was transferred via a third party through the Omni bridge of the Gnosis chain, and then replayed the same message on the PoW chain to duplicate the message and net an extra 200 ETHW.
What is your sentiment on ETH/USD?
The short analysis of the attackhttps://t.co/87OVRqaYb2 https://t.co/vhRJyZVc72
— BlockSec (@BlockSecTeam) September 18, 2022
Crypto market takes a hit
The broader cryptocurrency market has faced a significant decline since its peak in November 2021 as a result of rising global inflation rates and heightened restrictions from regulators.
Bitcoin has witnessed the biggest decline with the cryptocurrency, as of 20 September, down more than 55% this year alone. The price of the largest cryptocurrency was floating around the $20,000 level as of last week before dipping to a low of $18,800 earlier today.
Ethereum has also witnessed a sharp decline since its performance earlier in 2022, which saw the price of the largest altcoin trading around the $3,000 mark in April. As of 20 September, ETH was trading at around $1,350.
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