SharedStake Dev Goes Rogue, SGT Price Plummets 95%
SharedStake's team is advising users to withdraw all funds from the protocol and await further updates.
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One of the developers of Ethereum 2.0 staking protocol SharedStake has gone rogue and is exploiting the protocol’s governance token SGT.
An Inside Job
One of the developers of SharedStake is using their admin key to exploit the protocol’s governance token SGT.
SharedStake is a staking protocol for Ethereum 2.0 which allows users to mint vETH2 in exchange for their ETH. Other team members have advised users to exit SharedStake’s liquidity mining contracts and the Saddle pool ETH-vETH2 and await further updates.
While vETH2 is still safe, the loss of confidence in SharedStake could lead to vETH2’s value dropping against ETH. Similarly, although Saddle contracts remain unaffected, the value of SharedStake’s liquid ETH solution could be worthless if the rogue developer exploits that contract as well.
The rug pull has led to a community debate around admin keys, the special access codes that allow developers to access and change their protocol’s key contracts. Users of Meerkat Finance, a protocol on Binance Smart Chain, also suffered a similar fate when their developers ran off with $31 million worth of funds.
The price of governance token SGT has dropped 96% since the hack, currently sitting barely above $0. The current market cap has dropped to $33,000 according to CoinGecko.
Disclaimer: The author held ETH at the time of writing.