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XCarnival is an Ethereum liquidity provider and an NFT lending pool that enabled NFT buyers to deposit their assets in exchange for liquidity. The platform recently lost approximately US$4 million after a hacker exploited a flaw in its smart contract functionality. XCarnival generally uses smart contracts to manage lending restrictions, and fund asset storage, and most importantly, these contracts act as an NFT manager. Any shortcoming in these smart contracts would eventually cause massive amounts of damage to the assets that the platform stores to lend favors.
The hacker technically stole 3,087 ETH tokens from this exploit, but the bounty deal made by the company's executives with the hacker reached the headlines! Blockchain security and analytics company, PeckShield, reported the hack, along with the fact that the withdrawn pledged NFTs were planned to be used as collateral, which the hacker would have exploited to drain all the stored assets from the pool. But to save the customers from an imminent financial loss, the company decided on suspending the smart contract altogether and offered a bounty of 1,500 ETH tokens to the hacker for returning the stolen funds. XCarnival also assured me they would not pursue any legal action against the hacker!
In this rare and unusual occurrence, the hacker actually accepted the bounty and assured that the funds will be returned safely, given the XCarnival CEO signed an official statement stating the same. He also asked to explicitly veto lawsuits too.
This incident is just one of the several occurrences of crypto scams in the NFT market. Recently, Bored Ape Yacht Club made headlines after facing several scams and thefts at a time when both the crypto and NFT markets were facing immense volatility and loss in investor trust. The NFT and crypto markets are in the limelight since economic and financial experts are analyzing the market with scrutiny after major cryptocurrency prices declined in 2022.
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Disclaimer: Analytics Insight does not provide financial advice or guidance. Also note that the cryptocurrencies mentioned/listed on the website could potentially be scams, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. You are responsible for conducting your own research (DYOR) before making any investments. Read more here.
