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What happened to Gala Games? GALA token price crashes amid apparent $2bn hack of P2E platform

By Raphael Sanis

Edited by Charlie Mellor


Updated

The Gala Games token logo and name appears in red on a background of binary code
$2bn worth of GALA was redeployed after a bridge malfunction – Photo: Shutterstock

Gala Games (GALA) is attempting to calm “FUD” (fear, uncertainty and doubt) after what has been described as a multi-billion-dollar exploit.

The blockchain gamefi company has reassured its community on Twitter that this was just procedure and the price is recovering. But scars have been left and, at the time of writing, GALA was still down 18% over the past seven days.

GALA to USD

A bridge malfunction

The PeckShield blockchain security organisation raised an issue on the PancakeSwap decentralised exchange (DEX) after a single address managed to mint more than $2bn worth of GALA tokens. This sparked fears that the unusual activity was a sign of an exploit or a rug pull.

However, it was in fact caused by the multi-chain routing protocol pNetwork, which provides infrastructure support for Gala Games and other decentralised finance (DeFi) organisations.

Specifically, pNetwork created a bridge for GALA, which allowed investors to trade between the Ethereum and BNB Chain.

But, a vulnerability was recently found in this bridge as the engineers had left a key in the contract. This could allow a malicious attacker to change the controlling address.

Explaining the vulnerability, a Gala Games Medium post said: “Essentially, the BNB Chain contract was a loaded bomb that could go off at any time if the malicious actor decided to exploit the contract.”

Gala Games reached out to exchanges, informing them of the situation and asking them to suspend the BEP-20 GALA tokens. But not every exchange decided to act on the information, according to Gala Games.

BTC/USD

67,485.00 Price
-0.470% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

BCH/USD

492.40 Price
+0.740% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.50

XRP/USD

0.53 Price
+1.240% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

ETH/USD

3,706.97 Price
-1.330% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00
The Medium post continued: “With this knowledge, pNetwork enacted their plan to drain the liquidity pool in order to give it back to the users upon redeployment of the new secured contract.”

Not only did this stir FUD in the community, but users attempted to take advantage of the price difference between the BNB Chain and Ethereum versions of the GALA token.

Gala’s response and warning

Soon after the issue was raised by PeckShield, James Brink, head of blockchain at Gala Games, reassured investors.

He tweeted: “Everything is fine. The activity you have been seeing on PancakeSwap is pNetwork working to drain the liquidity pool. GALA on ETH is completely unaffected.”

Both pNetwork and Gala Games’ Brink warned users to halt trading GALA on the PancakeSwap exchange. PNetwork said: 

“A new pGALA token will be created to replace the old compromised one and airdropped in the coming days to those who had pGALA before the pool was drained. This new token has NOT been issued yet so don’t get scammed – we will share official updates in this thread.”

Can GALA recover?

It was set to be a successful month for GALA after the launch of its long-awaited Spider Tanks game. Yet the malfunction has sent the price of GALA tumbling.

It opened at $0.38 on 3 November and climbed to a high of a fraction over $0.40 that day. However, the “FUD” saw GALA plummet to a low of $0.28, a fall of 42% from its peak that day.

The gaming token has managed to recoup some of its losses. As of 7 November, it was trading at around $0.34, but was still down 18% over the past week.

Markets in this article

GALA/USD
GALA/USD
0.04333 USD
0.00011 +0.260%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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