Memecoins Under Pressure as SHIB, Dogecoin Slide After Shibarium Loses $2.4M in Hack

Top meme tokens have taken a hit this week, with popular cryptocurrencies such as Shiba Inu's (SHIB) BONE token and Dogecoin (DOGE) experiencing significant losses after the recent hack on Shibarium, a layer-2 network of the Shiba Inu ecosystem. The attack saw an attacker drain approximately $2.4 million in ether (ETH) and SHIB from the platform.

The CoinDesk Memecoin Index has dropped 6.6% in the past 24 hours, while the broader market CoinDesk 20 Index is down just 2.3%. The BONE token, which was used to gain control of the majority of validator keys on Shibarium, has seen its value nearly erased after the attack.

The attacker borrowed 4.6 million BONE tokens through a flash loan to game the system and approve unauthorized transactions. With control over the validator keys, they were able to walk away with a large amount of crypto assets from the bridge that connects Shibarium with the Ethereum blockchain.

Flash loans are a type of loan raised with no upfront collateral and return the borrowed assets within the same blockchain transaction. The attacker's ability to game the system underscores the perennial security issues with blockchain technology.

SHIB fell by 4% on Sunday, losing $0.00001369, and has continued to weaken recently trading at $0.00001359. The cryptocurrency experienced significant volatility throughout the 23-hour trading window ended September 15 at 02:00 UTC, with an aggregate range encompassing $0.000006191.

Volume of 1.064 trillion tokens surpassed the 24-hour mean, signaling robust distribution pressure and prospective capitulation, according to CoinDesk Research's technical analysis model.

The BONE Token's Downfall

The BONE token, which initially doubled in value to over 36 cents after the hack, has now lost over 2% on a 24-hour basis, trading at around 20 cents. The token's decline is largely due to the loss of investor confidence following the attack.

Dogecoin Takes a Hit

Dogecoin, which fell by 4% on Sunday and lost further 5% to 27.36 cents since then, has also been affected by the hack. A massive transfer of DOGE to a centralized exchange likely added to the bearish mood in the market.

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