NULS Dev Team Loses $500,000 In Hack, Will Hard Fork To Mitigate The Damage

December 23, 2019 / by Crypto.IQ

An account owned by the NULS dev team has been hacked due to a security vulnerability, resulting in the loss of 2 million NULS, which is approximately 2% of the total circulating supply and is worth around $500,000.

The hackers were quick to dump 548,000 NULS worth around $140,000 onto various exchanges, but the dev team is preparing a hard fork to permanently freeze the remaining 1,452,000 NULS, to prevent these coins from causing further market damage.

It is unclear exactly when this hack happened, but in the last week NULS declined 14%, equivalent to a $3 million decline in market cap, which may have been partially due to coins being dumped from the hack.

It is unusual for a cryptocurrency to be hard forked over a $500,000 hack. The most notable incident in the past which could be considered similar was the Ethereum (ETH) decentralized autonomous organization (DAO) hack. The Ethereum (ETH) DAO was essentially a decentralized venture capital fund that was going to be used to promote projects that would enhance Ethereum’s (ETH) infrastructure, but a hacker stole $50 million from the DAO. The Ethereum (ETH) devs responded by performing a hard fork to rewind the blockchain and restore the $50 million. This caused a community split, since a fraction of the community believed this hard fork violated Ethereum’s (ETH) immutability, and Ethereum Classic (ETC) was born.

The Ethereum (ETH) DAO hack and subsequent hard fork shows how a hard fork which violates immutability can be quite controversial, and it is perhaps surprising that NULS is doing a hard fork for a hack of only $500,000. That being said, Liquidity for NULS trading pairs is generally between $10,000 and $100,000. Therefore, this hard fork may be necessary to prevent NULS order books from being drained.

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