Beanstalk suffers $18m hack

Beanstalk is the latest name in the cryptocurrency industry associated with a large-scale theft.

The cryptocurrency has lost $180m in USD reserves, inflicting a blow to its liquidity. The hackers managed to borrow funds and launch a 51% attack.

Essentially, the attackers were able to secure enough voting rights to transfer the money out of storage and undermine the currency value.

The Beanstalk cryptocurrency is tied to the value of the US dollar and is supposed to have a value of one US dollar per coin, making it a “stablecoin” by definition.

The latest hack raises fresh concerns whether such currencies aren’t too vulnerable after all and whether they can be exploited commercially.

Many central banks have openly criticized the idea of stablecoins arguing that they undermine financial stability and add more money to the supply but without actual value.

In other words, stablecoins may have an inflationary property and worse, they may one day end up causing inflation.

The Beanstalk hacking opens fresh concerns in whether cryptocurrency projects aren’t being developed too quickly, which leaves them prone to weaknesses and hacking vulnerabilities.

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Source

Updated: 04/20/2022 — 12:00