Recently, security alarms have once again sounded in the Web3 world. In just two days, consecutive hacker attacks on UXLINK and SFUND caused the value of related digital assets to evaporate by over one hundred million dollars, sparking widespread market concern and anxiety. This series of events is not just a cold numerical loss, but also a public lesson on technical security and risk awareness.

You might wonder, why are these seemingly indestructible blockchain projects so vulnerable? Let's delve into the incident itself to understand the underlying principles and lessons in the simplest way.

Incident Recap: A Chain of Security Alerts and Market Panic

The turmoil began on a seemingly ordinary trading day. First, one of the project teams issued an urgent security alert on social media, stating that its smart contract was suspected of being attacked. Almost simultaneously, community users noticed the project's token price began to plummet, and market sentiment instantly turned to panic.

However, this was just the beginning. Shortly after, another related project, SFUND, also reported an attack, with similar methods leading to similar consequences. The news that over $100 million evaporated in two days as UXLINK and SFUND suffered consecutive hacker attacks quickly spread throughout the crypto community. This pattern of chain attacks has cast deep doubts on the underlying security architecture of many current Web3 projects.

Attack Method Analysis: How Did Hackers Mint Tokens Out of Thin Air?

To understand the hackers' methods, let's use an analogy. Imagine a project's 'smart contract' is like a vending machine with set rules. You insert a specific token, and it dispenses the corresponding product. The machine's rules are public and transparent for anyone to inspect.

The hacker, in this case, is like a highly skilled inspector who, after carefully studying the machine's blueprints, discovers a hidden logical flaw. This vulnerability allows them to bypass inserting a coin; by simply pressing a special combination of buttons, they can make the machine 'think' it has received a command and continuously dispense products.

In this incident, the hackers exploited an undiscovered flaw in the smart contract, bypassing all normal verification procedures to directly call the function for 'minting' new tokens. In simple terms, they 'printed' a massive amount of tokens into their own wallets out of thin air at almost no cost, setting the stage for a subsequent sell-off to cash out.

Investigating the Chain Reaction: Why Did Losses Instantly Escalate to Over $100 Million?

Minting tokens out of thin air was just the first step. What truly caused the losses to escalate dramatically was what happened next. Here, we need to introduce the concept of a 'liquidity pool'.

You can think of a 'liquidity pool' as a large currency exchange pool containing the project's token A and another mainstream stable asset B (like a digital currency pegged to the US dollar). Anyone can swap A for B or B for A, with the price automatically adjusted based on the ratio of the two in the pool.

The hackers took the massive amount of 'fake' token A they had minted and rushed to this exchange pool, frantically swapping them for the real asset B. This process had two direct consequences:

1. Asset Depletion: The real, valuable asset B in the pool was quickly drained by the hackers.

2. Price Collapse: As the quantity of token A in the pool surged while asset B plummeted, the price of token A instantly approached zero due to supply and demand dynamics.

This 'market dump' triggered a chain reaction of panic, causing other holders to sell off as well, ultimately leading to a massive evaporation of market value in a very short time. Therefore, the losses caused by over $100 million evaporating in two days as UXLINK and SFUND suffered consecutive hacker attacks extend far beyond the assets stolen by the hackers; they also include the annihilation of value brought on by the collapse of market confidence.

The Project's Emergency Response: Can Token Swaps and Security Fixes Regain Trust?

Faced with the crisis, project teams typically take a series of emergency measures. The most common approach is a 'snapshot' and 'token swap'.

A 'snapshot' is like taking a picture of all token holders' account balances at a specific moment before the hack. Then, the project team issues a brand-new token with the vulnerability fixed and airdrops it to the innocent holders in proportion to the snapshot records. This turns the old, stolen tokens in the hackers' hands into worthless 'dead coins'.

While this method can compensate for users' direct losses to some extent, rebuilding trust is a long road. Users and investors will more cautiously evaluate a project's technical strength and emergency response capabilities.

Lessons Learned: What Should Web3 Projects and Investors Take Away?

Every security incident is a stress test for the entire industry. Both project builders and ordinary participants should learn lessons from it.

For Project Teams:

• Security Audits are a Lifeline: Before a project goes live, it must undergo rigorous code audits by multiple reputable third-party security firms. There is no room for complacency. According to industry data, more than half of all security incidents are related to inadequately audited smart contracts.

• Establish Early Warning and Emergency Mechanisms: Setting up a bug bounty program to encourage 'white-hat' hackers to find and report issues, along with developing a clear emergency response plan, is key to prevention.

For Regular Users:

• Keep Learning, Understand the Basics: Before participating in any Web3 project, take the time to learn fundamental concepts like what a smart contract is and what liquidity is. Knowledge is your best armor.

• Observe the Project's Security Transparency: A responsible project will proactively publish its security audit reports. Before investing your time and energy, it's wise to verify them.

• Choose a Reliable Starting Point: Ultimately, for ordinary users, choosing platforms that have been tested by the market over the long term, have a good reputation, and are subject to appropriate regulation for learning and initial experiences is a wise way to reduce risk.

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