According to its creator, a new protocol that allows the creation and exchange of digital objects on Ethereum has experienced a major setback due to a major hack in its main marketplace.
Ethscriptions, a novel method of creating Ethereum assets launched last month by Tom Lehman, co-founder and former CEO of Genius.com, uses transaction “call data” to write non-financial data to the blockchain network.
“About 123 individual addresses lost around 202 Ethscriptions in this exploit,” Lehman said. “Any young protocol will have rough landings, but this is not what I meant.”
Lehman took responsibility for the flaw and attributed the vulnerability to a smart contract developed by himself and Michael Hirsch, co-founder of Indelible Labs.
The flaw originated from a code snippet that allowed the unauthorized removal of Ethscriptions from the market.
While the Ethscriptions protocol and other related applications remain uncompromised, many listings on Ethscriptions.com were reportedly stolen, according to Lehman’s tweet on Friday.
The exact extent of the value lost due to exploitation remains uncertain; however, recent data from the OpenSea NFT marketplace reveals that certain Ethscriptions sold for up to 5 Ethereum, roughly the equivalent of $9,600, over the past month, highlighting the significant impact.
Lehman’s response to the Ethscriptions marketplace hack
Lehman raised awareness of the exploit on July 14 and a notice about the affected state of the market continues to be displayed on Ethscriptions.com.
The website includes a warning advising users to withdraw their Ethscriptions and avoid creating new listings due to the current issue with the marketplace contract.
Lehman expressed his dismay at the loss of Ethscriptions, describing it as “terrible”, with specific emphasis on the theft of Ethscription #56, which he deemed “brutal” due to its rarity among previous artifacts.
Furthermore, the exploit has an added sting, as it was meant to serve as a guiding example for other markets looking to incorporate Ethscriptions support.
“The purpose of the marketplace was basically to help show other people how to create markets and help build an ecosystem,” he said. “Unfortunately, we fell flat on our face in that area.”
Ethscriptions Marketplace Renewal: Lehman Relaunch Plans and Communication with Affected Users
Regarding this new protocol, Lehman recognized the challenge of balancing cost-saving measures by limiting smart contract storage usage while managing contracts strategically, particularly in market scenarios.
“This process has also completely changed my perspective on how markets can implement the protocol and I believe it will lead to a much healthier ecosystem in the long run.”
He stressed the need to devise methods to provide smart contracts with the necessary information or ensure that they operate independently of such requirements.
Lehman announced plans to relaunch the Ethscriptions.com marketplace once the necessary protocol adjustments have been implemented.
He has been actively communicating with those affected by the exploit and has admired them as “early adopters” of the Ethscriptions protocol on Twitter.
