Cardano fell victim to an attack that split the network into two, but swift action from several engineering teams has resolved the issue. At press time, the bad actor behind the chain partition has been identified, with Charles Hoskinson threatening legal action as ADA trades below $0.5.
A Network Partition Spooks Cardano Users
According to on-chain data, the Cardano mainnet experienced a network partition event just a day after the preview testnet faced similar issues. The fork split the Cardano network into two distinct chains, with an incident report blaming the chain partition on a “malformed delegation transaction.
Published by Intersect, the incident report noted that the malformed delegation transaction exploited a bug in an underlying software library from 2022. While previous ledger versions have masked the bug, Intersect’s analysts say the attacker used specialized tooling to trigger the bug.
“The bug allowed an oversized hash in a malformed delegation transaction to pass initial validation checks when it should have been rejected,” read Intersect’s report.
Aware of the divergence, engineering teams from the Cardano Foundation, Input Output, and Intersect collaborated to develop a hotfix for the issue. Within hours, SPOs and other node users were instructed to upgrade their nodes, increasing the weight of the healthy chain with the poisoned chain and its blocks rendered invalid.
Contrary to claims, the incident report noted that Cardano did not stall, and both divergent chains produced blocks throughout the incident. Meanwhile, several cryptocurrency and third-party service providers have paused deposits and withdrawals as a precautionary measure. A specialized working group is tasked to reconcile valid transactions from the poisoned chain into the main “healthy” chain.
Suspect Identified Amid Threat Of Legal Action
Intersect’s incident report disclosed that the team has identified the wallet responsible for the malformed transaction. Preliminary investigations linked the wallet to a participant from the Incentivized Testnet (ITN) era, with the team branding it a potential cyberattack.
At press time, the Federal Bureau of Investigation (FBI) and other relevant authorities were investigating the attack. Pseudonymous X user Homer J has claimed responsibility for the incident, describing his actions as a personal challenge without the intent to cause harm or make a profit. Meanwhile, Cardano founder Charles Hoskinson downplayed his reasons for triggering the bug. Hoskinson argued that the incident is a personal, premeditated attack by a disgruntled SPO with a long-standing animosity toward the Cardano founder. In a series of X posts, Hoskinson revealed that the incident targeted his personal pool and could have far-reaching consequences for the network.
Since the incident, Cardano’s price has fallen by nearly 7% to $0.4095, a steep decline of over 35% in the last 30 days. Previously, a Cardano whale lost $6.2 million in ADA during a botched stablecoin swap, adding heavy downward pressure on the beleaguered asset.
Source: https://zycrypto.com/cardano-network-undergoes-unexpected-fork-as-ada-price-tumbles-below-50-cents/
