In a recent tweet, Binance CEO Changpeng Zhao admitted that his warning about Uniswap, the largest decentralized cryptocurrency, was a false alarm. But before Zhao’s confession, the price of Uniswap’s UNI altcoin project had already fallen. Here are the details…
Binance CEO’s tweet lowered altcoin price
Earlier today, Zhao tweeted about a “potential exploit” in Uniswap V3 that allowed a hacker to steal 4,295 Ethereum (roughly $5.1 million). This negative and alarming comment led to a huge drop in the price of the native UNI token. However, a Blockchain security and data analytics company concluded that the alarm was false. He explained that this is a normal process in terms of collecting fees and withdrawing liquidity. In a follow-up tweet, Zhao explained that it was a phishing attack after contacting the Uniswap team.
The UNI token trimmed some of its losses after the announcement. But it’s still down more than 9 percent in the last 24 hours. It underperformed the rest of the cryptocurrency market. UNI changed hands at $6.24 during the day and fell to $5.36. It changes hands at $5.56 at the time of writing.
What had happened?
According to a Reddit post detailing the attack, after airdropping a malicious token to 73,399 addresses, the attacker managed to steal ERC20 tokens and some NFTs above ETH. The total amount is thought to be 7,500 Ethereum ($9.1 million). Users who were trapped into checking for the fake token were directed to a Uniswap impersonator who asked users to link their wallets to drain their funds. The stolen cryptocurrency is currently laundered with the help of the Tornado Cash decentralized mixer protocol.
Uniswap users have been warned not to interact with any questionable tokens following the recent phishing attack. Meanwhile, in May, the decentralized exchange surpassed $1 trillion in user fees. Uniswap is a popular decentralized trading protocol known for its role in facilitating automated trading of decentralized finance (DeFi) tokens.
Uniswap, an example of automated market makers (AMM), was launched in November 2018. But it has gained considerable popularity in the past year thanks to the DeFi phenomenon and the associated surge in token trading. Uniswap aims to keep token trading automatic and fully open to anyone who owns the token, while improving trading efficiency compared to traditional exchanges. Uniswap creates more efficiency by solving liquidity problems with automated solutions. It avoids the problems that plague decentralized exchanges. As we reported as Kriptokoin.com, in September 2020, Uniswap created its own governance token UNI and gave it to former users of the protocol.
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