🔥 Land A High Paying Web3 Job In 90 Days LEARN MORE

Lido Finance reassures investors amid security flaw concerns in LDO token contract

365010
Lido Finance Reassures Investors Amid Security Flaw Concerns in LDO Token ContractLido Finance Reassures Investors Amid Security Flaw Concerns in LDO Token Contract

In this post:

  • Lido Finance acknowledges a security flaw in its LDO token but assures tokens are secure.
  • SlowMist identifies the flaw, which allows transactions without sufficient funds. Lido Finance argues the issue is common to all ERC-20 tokens.

Ethereum staking protocol Lido Finance has publicly acknowledged a known security flaw in its LDO token contract. The announcement came in response to a September 10 post by blockchain security firm SlowMist, which highlighted the vulnerability that could potentially enable “fake deposit” attacks on cryptocurrency exchanges, Cryptopolitan reported

Despite the concerns, Lido Finance reassured investors that both Lido DAO LDO and staked-Ether (stETH) tokens remain secure.

Lido Finance counters SlowMist’s allegations

SlowMist’s analysis revealed that the flaw in the LDO token contract allows users to execute transactions even when they lack sufficient funds. This deviation from the Ethereum Request for Comment 20 (ERC-20) token standard could facilitate unauthorized transactions. SlowMist also claimed that the token contract had recently been exploited through this vulnerability, although no on-chain evidence was provided to substantiate the claim.

Lido Finance countered SlowMist’s allegations by citing the official Ethereum Improvement Proposal document, co-authored by Ethereum founder Vitalik Buterin. The document states that “both the “transfer” and “transferFrom” functions must return the transfer status and are only recommended to revert a transaction in exceptional cases.” Lido Finance argued that the flaw is inherent in all ERC-20 tokens, not just in Lido’s LDO token.

SlowMist has advised LDO token holders to check the return values of token contract transfers in addition to monitoring the success or failure of a transaction.

See also  Bitcoin's aggressive $100K rise will bring out the 'Holiday Effect'

To mitigate the security risk, Lido Finance also confirmed that updates to the LDO token integration guides are imminent. The company said it is taking proactive steps to address any security flaws.

According to data from DeFiLlama, the total value locked (TVL) in Lido stands at over $14 billion as of September 11. It’s worth noting that LDO, an ERC20 governance token, is leveraged for voting on improvement proposals in the Lido DAO.

A Step-By-Step System To Launching Your Web3 Career and Landing High-Paying Crypto Jobs in 90 Days.

Share link:

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

Most read

Loading Most Read articles...

Stay on top of crypto news, get daily updates in your inbox

Editor's choice

Loading Editor's Choice articles...
Cryptopolitan
Subscribe to CryptoPolitan