Grand Base Token (GB) Drops 99% Due To Rug Pull Rumours and Hack Attack

Following reports that the protocol’s deployer created millions of new tokens, Grand Base’s token value plummeted nearly 100%, sparking fears of a potential rug pull.

The tokenization protocol of real-world assets, Grand Base (GB), which operates on Coinbase’s native layer-2 blockchain, incurred losses amounting to $1.7 million due to a compromise of a private key.

An admin of the protocol conveyed in a Telegram chat that an exploit occurred in their contracts at 03:01:27 AM +UTC on April 15, advising all community members to avoid the compromised contract as it was no longer secure.

An Excess Number Of Grand Base Tokens Were Minted Without Authorization

Blockchain analytics firm PeckShield reported that a leak of a private key led to the theft of $1.7 million in tokens from its liquidity pools. The stolen tokens were exchanged on-chain for Ether (ETH) and then transferred to an external address. In the aftermath of this security breach, the protocol’s native token plummeted by 99% in value within 24 hours.

An administrator from the Grand Base Telegram channel warned users that the token contract was no longer secure and advised against swapping or interacting with it. They assured users that updates on further actions would be provided promptly.

Further examination by blockchain analytics firm CertiK revealed that the hacker had accessed Grand Base deployer contracts, illegally minted an excessive number of GB tokens, and subsequently withdrew them.

Grand Base staff later stated that they had identified all wallet addresses associated with the hacker and were coordinating with centralized exchanges (CEXs) to potentially freeze any transferred funds, indicating ongoing efforts to mitigate the fallout from the hack.

User Comments On The Hectic Situation

In the Grand Base Telegram chat, a user expressed deep regret for those affected by the hack and advised against further investments, urging people not to deposit more money into the platform under any circumstances.

Another user pointed out potential security vulnerabilities within the contract, noting that despite the discrepancies, the total balance appeared unchanged, raising questions about whether these issues were an oversight by the developers or intentional.

Before the incident, the Grand Base protocol, which was introduced less than five months ago, had a limit of 50 million GB tokens. The protocol allowed participants to use collateral to mint real-world assets as ERC-20 tokens and provided opportunities to earn rewards through liquidity provision for these tokenized assets.

Grand Base Team Says That Losing Control Of The Developer Wallet Was The Main Point Of Attack

Analysts from the AI Web3 security firm Cyvers underscored the critical nature of the recent security breach. They pointed out that the attacker’s capacity to mint new tokens not only escalated the financial impact but also revealed significant security vulnerabilities.

The loss of access control by the compromised deployer’s wallet was particularly alarming, with Cyvers analysts stressing the need for stronger security measures and continuous monitoring to prevent such substantial future losses.

The breach was further highlighted by two major unauthorized transactions that were recorded from the compromised wallets, transferring 206 and 319 ETH to external addresses, respectively.

In reaction to this security issue, Grand Base communicated the breach via its Telegram channel, reassuring users of their proactive efforts to resolve the security issues. The team specifically noted that losing control of their developer wallet was a critical aspect of the security breach.

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