- A software developer has drawn attention to a “loophole” in the MakerDAO system which describes a theft of all 340 million ethereum (ETH) currently stored in the system.
- In response, the MakerDAO team published a poll on the Governance Security Module (GSM) in the governance portal.
Micah Zoltu, a software developer and co-author of the original whitepaper for the decentralized prediction market Augur (REP) published a blog post on Monday describing a possible attack on the MakerDAO system. As Zoltu explains, all 340 million Ethereum (ETH) currently deposited in the MakerDAO are in danger. The hack doesn’t even require much programming knowledge. Instead, only a large amount of MakerDAO (MKR) is required.
In his blog post “how to turn $20M into $340M in 15 seconds” Zoltu explains that the ” loophole “, as Zoltu describes it, enables any attacker holding about 40,000 MKR (about 20 million US dollars) to transfer all Ether (ETH) deposited as collateral in the MakerDAO system to himself. For this the attackers would only have to use the governance model of MakerDAO by voting for their own proposal, namely to send all Ethers to the attacker’s address, with the aforementioned amount of MKR.
To prevent such attacks, there is a delay time (“Governance Security Module” – GSM) in the MakerDAO system during which the MakerDAO community can conclude the contract. However, this is currently parameterized with 0. As Zoltu writes, the attack is only possible for a few MKR wales. However, owners of larger MKR amounts could also join forces to execute the attack. According to Zoltu, the attack could proceed as follows:
- Acquire 80,000 MKR.
- Create an executive contract that is
- Vote on the contract immediately (in the same transaction).
- Immediatly (in the same transaction) activate the contract.
- Drive with 340 million USD ETH into the sunset.
As Zoltu writes, with some patience and sophistication, MKR 40,000 could be enough for the attack.
MakerDAO reacts to the accusation
Shortly after the blog post gained great attention, the MakerDAO development team responded to the accusations. They explained that the problem was known to the team and that nothing had been done on purpose because the threat was not considered real. In response to Zoltu’s blog post, it claimed that the article increased the possibility of hackers exploiting this vulnerability.SINCE THE LAUNCH OF MCD, THE DELAY HAS BEEN SET TO 0. THIS ALLOWED THE COMMUNITY TO TAKE IMMEDIATE ACTION TO MITIGATE TECHNICAL ERRORS, ORACLE MALFUNCTIONS, OR OUTLIER CASES LIKE A MARKET PANIC OR AN ECONOMIC ATTACK. […]
THE COMMUNITY PREVIOUSLY CONSIDERED THE POSSIBILITY OF THE EXPLOIT BUT IT WAS NOT AN IMMEDIATE ISSUE. HOWEVER, THE PROBABILITY OF THIS EXPLOIT GREW DUE TO POTENTIAL PUBLICITY FROM THE AFOREMENTIONED BLOG.
As a result, the MakerDAO team reacted yesterday. A survey has been added to the governance portal to allow the community to vote on the Governance Security Module (GSM). If the proposal is accepted, the change will increase the GSM delay from 0 to 24 hours. The potential attack would no longer be possible in the sense that it would be possible to react and close the contract.
The Maker price, however, is unimpressed by the negative headlines and moves sideways in line with the current market trend.
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Last Updated on 10 December, 2019
Ethereum Above This Key Level for First Time in 6 Months: Is a Surge Coming?
While Bitcoin (BTC) saw a crazy week in and of itself, gaining 10%, Ethereum outpaced the market leader. The second-largest cryptocurrency by market capitalization gained 20% over the past seven days, pushing to $175 for the first time in weeks.
While some analysts are skeptical that this rally will last, citing the fact that ETH printed a clear swing failure candle at the top of the rally, a top analyst just observed that the cryptocurrency has surmounted two key price levels on the daily chart.
Related Reading: Ethereum’s Price is “Convincingly Bearish”: Here’s What Comes After 20% Week
This suggests that a surge could be supported in the coming weeks.
Ethereum Tops Two Key Price Levels
Brave New Coin’s Josh Olszewicz recently observed that Ethereum’s one-day chart has printed an extremely bullish sign: the price of ETH just crossed above both the 200-day exponential moving average and the Ichimoku Cloud for the first time since July 2019.
NewsBTC’s analysis found that a majority of the time the cryptocurrency found itself trading above the two key resistances that were aforementioned, prices continued to rally higher, sometimes gaining dozens of percent more.10 BTC & 20,000 Free Spins for every player in mBitcasino’s Winter Cryptoland Adventure!
This historical strength would suggest Ethereum has room to rally higher in the coming weeks.
Related Reading: Research Firm: 3 Use Cases Could Send Bitcoin To $1 Trillion
Not Only Positive Sign
Olszewicz isn’t the only Ethereum bull.
Dave the Wave, the cryptocurrency trader who in the middle of 2019 called Bitcoin’s decline to $6,400, posted the below chart last week. He noted when the cryptocurrency was at ~$150 that he expects ETH to push towards $200. This move would put ETH above a key falling wedge structure, which would bode well for bulls.
This comes shortly after the prominent trader noted that Ethereum recently bounced off the 0.786 Fibonacci Retracement level of the price action from the 2018 bottom to the 2019 bottom, while the Moving Average Convergence Divergence (MACD) has shown signs of a reversal on a medium-term basis, boding well for bulls.
Although the number of new Ethereum addresses may not seem to related to ETH’s price on the surface, the user’s chart shows that there is a clear correlation between the two metrics, with address count growth seemingly preceding price action.
Due to this historical correlation, the rapid growth seen in this metric could imply that the second-largest cryptocurrency has extreme upside potential ahead of itself, upside that may take it back towards $200 and $300.
A Strong Uptrend Is Forming For Ethereum And It Could Rally To $200
Ethereum gained bullish momentum above the $170 resistance against the US Dollar, and bitcoin jumped above $9K. ETH price is likely to continue higher towards the $195-$200 resistance area.
- ETH price is showing a lot of positive signs above the $165 and $170 levels against the US Dollar.
- The price traded to a new 2020 high close to $180 and it is currently consolidating gains.
- There is a key rising channel forming with support near $172 on the 4-hours chart of ETH/USD (data feed via Kraken).
- Bitcoin is up around 3% and it broke the main $9,000 resistance area.
Ethereum Price Could Test $195-$200
This past week, there were mostly positive moves in Ethereum above $160 against the US Dollar. ETH gained bullish momentum and broke many hurdles near $165 and $170.
Moreover, there was a close above $170 and the 100 simple moving average (4-hours). Finally, the price traded to a new yearly high at $179 and it is currently consolidating gains.
It traded below the 23.6% Fib retracement level of the recent wave from the $165 low to $179 high. The first major support on the downside is near the $172 level. Besides, there is a key rising channel forming with support near $172 on the 4-hours chart of ETH/USD.
The 50% Fib retracement level of the recent wave from the $165 low to $179
On the upside, the first major hurdle for the bulls is near the $180 level. A successful break above the $180 resistance area could set the pace for more gains above $190.
The main resistance above $180 is near the $195 and $200 levels, where sellers are likely to emerge. A clear break above the $200 barrier would suggest an opening for a long term uptrend.
What’s Bearish for ETH?
The first key support is near the $172 level, below which Ethereum price might extend its correction towards the $165 support. The next major support is near the $160 area and the 100 simple moving average (4-hours).
Only if ETH bears succeed in pushing the price below $160 and the 100 simple moving average (4-hours), the price could turn bearish. If not, it is likely to extend gains above the $178, $180 and $185 levels in the near term.
4 hours MACD – The MACD for ETH/USD is gaining momentum in the bullish zone.
4 hours RSI – The RSI for ETH/USD is currently well above the 55 level.
Major Support Level – $165
Major Resistance Level – $180Tags:ETHethereumBitStarz Player Lands $2,459,124 Record Win! Could you be next big winner?
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Latest News and Top Headline for Ethereum, January 19th, 2020
- Ethereum’s shift to PoS has been slow
- The biggest Ethereum 2.0 testnet gets 22,000 validators
- Shift to Ethereum 2.0 will shake up the network
Ethereum News Today – The benefits of the Proof-of-stake consensus mechanism cannot be overstated. No wonder crypto networks are embracing this protocol. Ethereum, home of the second largest digital asset by market capitalization has since announced a shift from the Proof-of-Work (PoW) to the Proof-of-stake (PoS) protocol. Normally, everything is supposed to been completed by now, but this isn’t the case with Ethereum.
The network’s shift from a PoW model to the PoS network has been very slow. Ethereum’s major upgrade to Ethereum 2.0 hasn’t moved as fast as it should have started for a long time now. A launch date hasn’t been revealed. But it is safe to say that the network is currently moving in that direction. We can agree that it has achieved some level of success in that regard so far.
Ethereum (ETH) Price Today – ETH / USD
The Ethereum 2.0 Testnets Have Been Taken Online for Probing
As a result of the slow process, the testnets for the Ethereum 2.0 upgrade have been taken online for probing by interested parties.
The Ethereum 2.0 testnet reportedly saw an enormous number of participants according to Prestan van Loon. Loon is a developer at Prysmatic. According to him, the network saw 100% participation from 22,000 active validators. Loon also revealed that because there’re 22,000 validating keys, it is difficult to know who is in control of the keys as well as who is observing. He also believes that there are at least “5 to 10 individual operators.”
The Change in Protocol will Thoroughly Shake the Network
At the testnet level, Ethereum 2.0 team has opened the doors to hackers to try to exploit the network for weaknesses. This is to test the strength of the latest upgrade. The change to Ethereum 2.0 will thoroughly shake the network. Experts agree that the shift would have a serious impact on the network’s gaming, financial, and trading ecosystems. The result of this could be a situation where the number of Ethereum 2.0 upgrade supporters becomes low at the start. However, the Ethereum 2.0 upgrade will operate on a PoS model so the outcome might be better than what many expect.