MoonNode, a validator operating on the Crypto.org network, suffered a penalty known as slashing after its infrastructure was compromised by a hacker who performed double-signed transactions. This resulted in a loss of 5% of the total staked CRO for MoonNode. The 5% penalty amounted to approximately 450,000 CRO, which was burned. At the time of the incident, MoonNode had around 9 million CRO staked.
The information about this incident was shared on Twitter by IcyCRO, which is a validator and a Cosmos InterBlockchain Communication (IBC) relayer for tokens like cosmos (ATOM).
The slashing mechanism employed by the Crypto.org chain differs from that of other projects within the Cosmos ecosystem. While many Cosmos chains impose penalties for downtime, the Crypto.org chain enforces an extended jail time of 24 hours. In this case, the double signing led to a 5% slash of all staked CRO in MoonNode.
MoonNode, operated by Emrit, is a validator service that enables users to stake CRO and earn rewards. The loss of 5% due to the penalty resulted in approximately 450,000 CROs being burned. Notably, MoonNode’s largest delegator, who had 1 million CROs staked, lost 50,000 CROs from their stake.
Apart from the monetary loss, the validator also incurred additional costs due to the hack. When a validator is jailed for excessive downtime or double signing, they are temporarily removed from the validation process. After a jail period of 10 minutes, validators need to initiate an “unjail” transaction manually to rejoin the validation process. During jail time, the validator cannot participate in transaction validation or earn rewards, causing significant missed opportunities.
This incident involving MoonNode emphasizes the importance of maintaining security and adhering to network rules for validators. It also serves as a reminder for delegators to carefully assess validators’ reputation, performance, and security measures before delegating funds.
As of July 9, the price of CRO has remained stable for the day but has decreased by over 50% compared to the previous 12 months. Currently, each CRO coin is valued at $0.056.