A Brief Introduction to Infinite Mint Attack

Introduction

Hacks and attacks are not new in the blockchain and web3 space. However, these attacks often cause severe losses. It is crucial to be proactive in understanding about these attacks and learning how to prevent them. One such attack is the Infinite Mint Attack. Let’s understand it.

What’s an Infinite Mint Attack?

An Infinite Mint Attack occurs when attackers manipulate the contract’s code to constantly mint new tokens, often beyond the authorized limit. Hackers manage to mint an absurd number of tokens within the protocol, which often leads to debasing the value of each token.

These attacks usually happen so swiftly that the attackers manage to take home tokens worth millions of dollars. Sometimes, attackers even dump all the minted tokens on the market, causing an insane price crash.

Such attacks have now become common in the blockchain space, mainly because of its security lapses, which make it easy for hackers to exploit bugs and other code vulnerabilities in the network.

One popular such attack was the Cover Protocol attack, in which attackers exploited the shield mining contracts to earn unauthorized crypto rewards from the network.

In this attack, hackers succeeded in exploiting 40 quintillion tokens on the Cover staking pool, which caused its token price to plunge by 97%. The hackers even liquidated over 11,700 coins through 1inch, stealing tokens worth more than $5 million.

How Infinite Mint Attacks Can Be Prevented?

The easiest and most common way to prevent an Infinite Mint Attack is to use the Proof of Work (PoW) algorithm on the blockchain network. In PoW, miners must solve complex mathematical problems to add new blocks to the chain. As this process requires a lot of computing power on the user end, it makes it quite difficult and expensive for hackers to mint new coins.

Other popular methods include:

• Incorporating a proof-of-stake (PoS) system
• Applying a cap on the total supply of coins
• Using master nodes on the network

These methods are quite effective in securing the network and further reducing the risks of Infinite mint attacks. Users can also prevent these attacks by performing a series of regular smart contract audits on their network from various firms. Although, audits don’t give any assurance that the protocol is completely secure.

A Popular Infinite Mint Attack

The Cover Protocol exploited a cybersecurity attack that happened in 2020 and exploited the vulnerabilities of the Cover Protocol Smart Contract. The vulnerabilities of the protocol allowed hackers to mint an enormous amount of COVER tokens, causing attackers to mint COVER tokens more than $37 million. The attackers later sold these tokens on various decentralized exchanges. These vulnerabilities were later discovered and patched by the PeckShield security firm.

Conclusion

To prevent infinite mint attacks, projects should opt for thorough and frequent smart contract audits offered by security experts and blockchain firms. By emphasizing robust security measures and audits and integrating real-time monitoring tools, projects, particularly those in the crypto domain, will be able to handle such attacks swiftly. Having certain backup solutions could also minimize the damage caused by these attacks.