On October 4, 2024, the EigenLayer community was rocked by news of a massive EIGEN token sale. A whale wallet was discovered to have dumped 1,673,645 EIGEN, worth around $5.5 million, via MetaMask. The discovery, made by Lookonchain, revealed that the tokens were received from the EigenLayer team’s wallet, sparking widespread confusion and concern.
A wallet sold all 1.67M $EIGEN via MetaMask at $3.3 after receiving it from the #Eigenlayer team wallet.
Address:
0xA7A1c66168cC0b5fC78721157F513c89697Df10D pic.twitter.com/H6EX40HXzh— Lookonchain (@lookonchain) October 4, 2024
The whale, believed to be an early investor or a wallet directly linked to the project team, raised immediate red flags. According to EigenLayer’s tokenomics, tokens allocated to investors and venture capital funds were locked and not scheduled to be unlocked until September 2025. The fact that such a large amount of tokens could be sold freely baffled the community, raising questions about potential security lapses.
The community speculated on two possibilities: either the investor had violated the token lock contract, or the wallet had been compromised by a hacker. Shortly after, EigenLayer addressed the issue on X (formerly Twitter), confirming the latter. The project revealed that the attack occurred through the hijacking of an investor’s email, leading to the unauthorized transfer of tokens to the hacker’s wallet.
Community Update:
In an isolated incident this morning, an email thread involving one investor’s transfer of tokens into custody was compromised by a malicious attacker.
As a result, 1,673,645 EIGEN tokens were erroneously transferred to the attacker’s address. The attacker…
— EigenLayer (@eigenlayer) October 4, 2024
EigenLayer’s statement clarified that the breach was not due to a vulnerability in the protocol or its smart contracts, and emphasized that the ecosystem remained secure. “This attack does not affect the EigenLayer ecosystem,” the team reassured. They also confirmed that a portion of the stolen funds had been frozen and law enforcement was involved.
However, the incident left many in the community questioning why tokens that were supposedly locked under a vesting contract could be sold so easily. Despite EigenLayer’s reassurances, the lack of clarity on this crucial point continues to fuel doubts about the platform’s overall security and token management.
The situation remains under investigation, with the community eagerly awaiting more answers regarding the apparent loophole in the token lock mechanism.
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