Zoth, a decentralized RWA protocol has taken to X, formerly Twitter, to announce that its system experienced a security breach.
According to reports, the hacker got away with over $8 million, mostly in stablecoin which was quickly converted to DAI. The hack seems to have first been reported by a user on X who provided proof something weird was going on.
The Zoth hacker made away with $8.4M from the RWA restaking platform. Source: Etherscan
More details about the hack
At this time, the identity of the hacker is unknown but Zoth declared in its tweet that it is “actively investigating the incident and taking all necessary steps to resolve it as swiftly as possible.”
It added that together with its partners, it is working to “mitigate the impact and fully resolve the issue” while promising that a detailed report with a clear view will be shared after the investigation is complete.
“Your patience and understanding mean a lot to us. Further updates will follow soon,” Zoth’s statement concluded.
According to reports, the hack was possible because of a compromised contract. The restaking protocol backed by Borderless and Blockchain Founders Fund lost exactly $8.4 million in assets.
An alert from blockchain security firm Cyvers Alerts claims that the protocol’s deployer wallet was compromised, triggering the suspicious transaction.
AIXBT, an AI agent who was also scammed earlier this week, confirmed the attack vector, pointing out that there was a malicious upgrade of the “USD0PPSubVaultUpgradeable proxy contract” and admin privileges were leaked, causing the original logic contract to be replaced.
The hacker reportedly converted the stolen assets to DAI within minutes and transferred them to another address. As a result of the breach, the Zoth website was taken down and is currently in maintenance mode.
The maintenance is probably a precautionary measure to ongoing security concerns, although no official confirmation on the extent of the breach has been provided.
At this time, the case is still evolving, and the community is on high alert as the platform works to resolve the issue. Further updates will be made available as the story develops.
The hack comes weeks after Zoth launched its restaking layer and stable token, ZeUSD
The RWA sector has been growing by leaps and bounds in recent times, so it is not surprising that it has been attracting bad actors.
The latest hack targeting Zoth came weeks after Zoth hit a huge milestone. In January, it launched what it called the world’s first restaking layer for Real-World Asset Finance (RWAFi) with its stable token, ZeUSD, aimed at bridging traditional finance (TradFi) and decentralized finance (DeFi).
Zoth claimed its mission is to unlock the $2T tokenized fixed-income market by building a permissionless layer for on-chain and off-chain RWAs. With the pre-deposit campaign, participants are able to gain early access to ZeUSD, a stablecoin fully backed by investment-grade RWAs such as Treasury Bills and ETFs.
The campaign presented an opportunity for early adopters to engage with the next wave of RWAFi, and their incentive was the chance to earn competitive yields while participating in a dynamic and evolving financial ecosystem.
As the global demand for tokenized RWAs continues to surge, products such as Treasury Bills, ETFs, and Money Market Funds are becoming increasingly desirable. Unfortunately, structural inefficiencies and the usual exclusivity within TradFi continue to limit access to these yield-bearing instruments for retail participants.
Zoth is addressing those barriers via its restaking layer, which creates a decentralized ecosystem that democratizes access to RWAs for retail and institutional users alike.
With ZeUSD, Zoth is able to provide a stable, omni-chain token fully backed by high-quality fixed-income assets, thereby combining the stability of TradFi with DeFi’s innovation and scalability.
“This is just the beginning! Our innovative re-staking approach is redefining the way RWAs are brought on-chain. Together, we’re building the future of RWAFi,” said Pritam Dutta, Founder & CEO of Zoth.
Koushik, Co-Founder & CTO of Zoth added that they believe the true potential of RWAFi is in “inclusivity” and they are committed to ensuring every user, regardless of their worth, has equal access to high-quality financial instruments.
Some attributes ZeUSD will have include fully collateralized stability, cross-chain compatibility, permissionless issuance, DeFi compatibility and boosted incentives.
The fully collateralized stability means ZeUSD is backed by a diversified mix of high-quality RWAs, ensuring trust and transparency, while its wide-ranging compatibility allows it to be seamlessly utilized across DeFi, maximizing yields for holders.
Zoth’s recent hack sets it back a ways, but given the team’s response, it is clear the project is not yet out of the game. Already, its journey has been marked by self-reported milestones, such as 25M+ in on-chain TVL across products, more than 2M wallets onboarded, and about 40M transactions processed through the Atlas platform in the testnet phase.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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