MoonNode, a validator on the Crypto.org network, was slashed and lost 5% of the total staked CRO after a hacker took over its infrastructure and doubled signed transactions.
As of July 9, the 5% slash translated to around 450,000 CRO worth $25,500 at spot rates has been burned. The validator had approximately 9 million CRO when the network enforced a double sign slash.
Crypto.org chain compromised, MoonNode validator slashed
The information was shared on Twitter by IcyCRO, a validator and a Cosmos InterBlockchain Communication (IBC) relayer of tokens like cosmos (ATOM).
According to IcyCRO, Moonnode got compromised, and the hacker double-signed, which led to the validator being “tombstoned.”
The slashing mechanism within the Crypto.org chain is different from other projects within the Cosmos ecosystem. While many other Cosmos chains impose penalties for downtime, the Crypto.org chain implements an extended jail time of 24 hours. In this instance, the double sign slash penalty resulted in a loss of 5% of all staked CRO in MoonNode.
MoonNode is a validator service that allows users to stake CRO and earn rewards. The service is operated by a company called Emrit. MoonNode had approximately 9 million CRO staked.
With the 5% penalty implemented for double signing, the validator lost roughly 450k CRO, which was burned. Notably, MoonNode’s largest delegator, who had around 1 million CRO staked, lost 50k CRO from their stake.
That wasn’t the only cost incurred in the hack. When a validator is jailed for excessive downtime or double signing blocks, they are temporarily removed from the validation process.
Validators need to trigger a manual transaction known as an “unjail” transaction to rejoin the validation process after the jail period of 10 minutes elapses. During this jail time, the validator cannot participate in transaction validation or earn rewards, resulting in a massive cost of opportunities lost.
Importance of due diligence
Validators play a crucial role in blockchain networks by validating transactions and maintaining the integrity of proof-of-stake (PoS) networks and blockchains that use a variant of the consensus system.
The incident experienced by MoonNode highlights the importance of maintaining security and adhering to the network rules. It also serves as a reminder for delegators.
According to IcyCRO, choosing a validator and assigning funds should not be done based on funny names or memorable puns. Delegators should carefully assess validators’ reputation, performance, and security measures before delegating funds.
As of July 9, CRO prices are stable on the last day but down over 50% over the previous 12 months. At press time, each coin is changing hands at $0.056.