LeetSwap, a decentralized exchange (DEX) built on the base of Coinbase’s Layer 2 Blockchain, announced on Twitter that it has temporarily suspended its operations due to security risks. The suspension came after the cryptocurrency exchange realized potential dangers to pool liquidity and prompted the need for urgent investigation. Here are the details…
Danger signals stolen in cryptocurrency project
According to Steven Zheng, Director of Research at The Block, LeetSwap was the victim of a hacker attack. This resulted in the theft of around 340 ETH worth $630,000. The stolen funds were taken from various trading pairs on the DEX, raising serious concerns about the security of decentralized exchanges. LeetSwap has gained popularity recently, particularly due to the presence of the meme coin BALD on Coinbase’s Layer 2 network. Like other meme coins, BALD experienced a meteoric rise in value on July 30, reaching 20,000 times its initial value. However, this spike triggered a liquidity crisis, causing the price to drop from $0.09 to $0.01 in a matter of hours. According to the data, BALD is currently trading around $0.006. This shows a significant 90 percent drop in value in just 24 hours.
— PeckShieldAlert (@PeckShieldAlert) August 1, 2023
Adding to BALD’s woes, at the end of July 31, the developers pulled a significant amount of liquidity from the project. Thus, he removed 6,800 ETH (equivalent to 12.5 million USD) from the liquidity pool on LeetSwap. This further contributed to the depreciation of the meme coin. He also highlighted the risks associated with uncontrolled liquidity in decentralized exchanges. The security breach on LeetSwap has rekindled concerns about the security and vulnerability of decentralized exchanges, especially when meme coins have become attractive targets for hackers. Such events can lead to significant losses for users. It can also severely affect the trading community’s trust in decentralized exchanges, which are built on the principles of transparency and security.
Meme coin market booming
As the investigation into the security breach continues, LeetSwap urged its users to be patient and careful. The team is working diligently to address the issue and strengthen the platform’s security measures before resuming operations. In the meantime, traders are advised to be cautious when participating in the volatile meme coin market and to be aware of other developments. cryptocoin.comAs we have also reported, the emergence of Base-backed coins, especially in the last week, renewed the interest in meme coins.
However, it is quite possible that sharp rises will result in sharp declines. Therefore, investors need to be especially careful. This event serves as a stark reminder for the entire cryptocurrency community to prioritize security and take robust measures to protect users’ funds and data. Decentralized exchanges should take proactive steps to guard against potential threats and increase overall confidence in the decentralized financial ecosystem.
