$ 36M worth of crypto transferred to nothing

A dispute is brewing as development teams, validation pools and token holders accuse each other of an address error that resulted in the crypto being sent to an invalid address. $ 36 million in crypto was transferred to a wallet that de facto does not exist.

Man in front of laptop hands in front of face confusion despair red background

$ 36 million away

The Cosmos-based Juno blockchain has been the subject of ongoing debate on blockchain implementation for some time. The Juno token is created in the COSMOS ecosystem and is a new currency.

A controversial public outcry over the confiscation of millions of dollars in tokens from a Japanese investor’s wallet. He was accused of manipulating a local airdrop last week. This failed after an error resulted in tokens being sent to the wrong person. Three million Juno tokens were sent to an unknown address. The reason for this was a simple typing error.

Crypto-exposed stocks are crashing

What is Juno?

Juno aims to be the first consensus-based blockchain protocol to support multi-chain applications, smart contracts and private chain isolation tokens. Smart contracts used on blockchain run across a network of multiple blockchains. An IBC smart contract cannot run on an external chain, but can be invoked from any other chain in the ecosystem.

Juno is a new blockchain network built on top of the Ethereum framework. Juno aims to be more efficient and cost-effective by using a proof-of-stake consensus method that enables decentralized voting.

A small mistake with big consequences

Juno tokens worth over $ 40 million were reportedly being removed from the wallet of a major Japanese investor. The Community’s vote on investor expropriation was unprecedented because it brought the principle of blockchain management into play.

Takumi Asano reportedly earned $ 120 million on Juno’s airdrop earlier this year. Asano had run an exchange service that rendered his wallet useless to the so-called Juno Stakedrop and obscured the equivalent of $ 36 million.

The funds were to be distributed to a “community” address so that the community could then do what they wanted with it. However, due to a typo, the money was sent to the wrong address, so neither the user nor the project received anything.

One mistake after another

One of the Juno developers said he sent the correct wallet address and hash key to the developer who made the transfer. Still, the current hash number and not the wallet address was likely copied, resulting in millions going to an offline account.

To make matters worse, a validator did not notice this. There should have been no verification of the number sequence before the transfer.

A solution in sight?

Juno is a custom control-based consensus mechanism. It is a blockchain based on the Ethereum protocol, but enhanced with features that enable the community to influence blockchain related decisions. This also allowed the investor to be expropriated. Work is underway to reverse the transaction in the same way.

In order for a change to be implemented, a majority must vote on it, and then the new software update must be released. Once this is done, the funds will be sent to the correct address within a week. A developer representative said:

Funds will be restored with another upgrade that adjusts chain status. PoS chance is not like Bitcoin, they are governed by control. If the government says something, even state changes can happen.

Consequences of the failed transaction

Blockchain is an open database that can be viewed by anyone. Transactions are transparent, making it easy to verify the validity and integrity of data. Mistakes like Citigroups, which on Monday led to a short-term price drop, can be more easily corrected. The consequences of this failed transaction are not yet predictable. Nevertheless, the consequences cannot yet be definitively assessed.

These trades with typos, also referred to as fat finger trades, are not known in real time even in classic financial business.

Errors come at the wrong time

The head of the Juno protocol department, Daniel Hwang, said developers can make mistakes and have to trust the validators because they end up running the codes. More precisely, he said:

The validators should have an obligation to take care of ourselves to actually validate the code we run.

Juno was recently the subject of controversy after its blockchain was the target of a clever contract attack that paralyzed it and caused a loss of over 1 billion. The company’s share price has fallen sharply since then. This repeated failure does not leave a good impression on crypto investors.

Eva Steinmetz shows great interest in the topics of cryptocurrencies, tokenization and artificial intelligence to optimize existing systems, such as the real estate or financial sector. In this context, the focus is on the changes in the regulation of cryptocurrencies worldwide.

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