In a recent development, the LSD protocol’s unshETH project disclosed that one of its deployment private keys had been compromised, resulting in an emergency suspension of unshETH withdrawals.
The incident happened around 10:00 pm on May 31. In order to prevent it from happening, the official team stopped all unshETHETH withdrawal activities in time.
According to their security model, deposited unshETHETH funds totaling $35 million in Total Value Locked (TVL) are protected by multi-signature and time-lock mechanisms, ensuring they are not at risk.
Additionally, some subsidiary protocol contracts, including farms and cross-chain bridges, were also attacked. In response, the unshETH team is working with white hat security experts from Coinbase, Stargate, Paladin Blockchain Security, Github, and ogle to ensure the safety of user funds. The impact is expected to be limited.
Additionally, the team has reached out to the hackers in an attempt to negotiate the return of funds and regain control of the compromised contract, thereby minimizing the impact on existing users.
Previously, Golden Finance reported concerns about the security of the LSDFi project’s unshETH vault, prompting key opinion leaders (KOLs) to advise users to move funds.
The incident was attributed to a compromise by the contract owner and the project’s official team was notified. However, they have yet to respond to this matter.
Known for its decentralized finance (DeFi) initiative, LSD Protocol aims to provide innovative solutions to users seeking liquidity and investment opportunities.
unshETH, as one of its flagship projects, has gained a lot of attention and attracted a lot of TVL. The recent security breach has caused concern in the DeFi community and highlights the ongoing challenges faced by projects operating in the rapidly evolving blockchain environment.
Working with renowned security experts, the unshETH team is working hard to resolve the issue and secure the affected contracts. They remain committed to ensuring the safety and trust of their users, while actively exploring measures to prevent similar incidents in the future.
