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The replay attack and some other factors are contributing to the downward spiral of the ETHW token.
On Sunday, September 18, exploiters launched a replay attack on the Ethereum Proof-of-Work (PoW) network. In literal terms, this means that exploiters replicated a message from the Ethereum Proof-of-stake (PoS) chain on the PoW.
But, per blockchain security firm, BlockSec – one of the early detectors of the attack, the unfortunate incident happened because the bridge failed to identify the real chainID of the cross-chain message. This made it easy for the attacker to replay a 200 ETHW-worth transaction on the PoW, after an initial one through the Omnibridge of the Gnosis chain. Thus, making an extra 200 ETHW in the process.
Meanwhile, CertiK can confirm that the exploiter has already transferred the funds to Singapore-based crypto exchange MEXC. However, as Coinspeaker earlier reported, BlockSec believes that the attacker may yet go on to drain the entire balance of the contract on the PoW chain.
Ethereum PoW Confirms Attack, Gives Details
The ETHPoW team has also confirmed the attack via its official Twitter page, albeit in slight contrast to BlockSec’s announcement. According to the team, it indeed was a replay attack, however, it didn’t happen on the chain level. Debunking the claims, the announcement said a chain-level replay attack is practically “impossible” on the ETHPoW chain. The team explained that, in fact, it was to ensure that such never happens that the network enforced EIP-155 before the hard fork. And because of that, transactions on the PoS chain can not be replicated on the PoW chain or vice versa.
Interestingly, the ETHPoW team claims that the attack was mere as a result of a loophole in the contract. They wrote in part :
“Bridges need to correctly verify the actual ChainID of the cross-chain messages.”
ETHW Drops 32% in 24 Hours
According to CoinmarketCap data, ETHW is reacting to the news of the attack in the worst way possible. Its price is down by over 32% in the last 24 hours, trading at $5.11 as of press time. This means that the ETHW token has now dipped by over 90% in the past two weeks.
It is worth mentioning that the downward spiral of the ETHW token may have other contributing factors as well. Recall that ETHW adoption first suffered a major blow during the week following Grayscale’s announcement of deciding to sell its tokens. Ether (ETH) — the original token of the Ethereum blockchain itself, also recently plunged to a seven-week low, according to a Bloomberg report, signalling a broader market downturn is still in play.