Is Crypto Under Threat? Hyperliquid, Stargate Finance, and the Multisig Debate

By BreakdownFab | DecryptLab | 24 Dec 2024


As I mentioned yesterday, Hyperliquid is under scrutiny due to potential targeting by North Korean hackers. Click this link for details. Meanwhile, conversations on X are escalating, with Stargate Finance now in the spotlight. Are we staring down the barrel of another major hack?  

The Multisig Risk  

A key concern is the multisig setup (multiple signatures required for transactions). Hyperliquid’s bridge, for example, would be controlled by two 3-of-4 hot wallet multisigs, managed by a single binary—a potential single point of failure. Experts like @Mudit__Gupta urge teams to increase thresholds and diversify controls.  

History gives us a chilling example: In 2022, Raydium faced a catastrophic hack when attackers compromised a multisig wallet, stealing over $4.4 million in funds. The issue? Concentrated authority allowed attackers to override the system.  

Why Crypto Could Be at Risk  

Bridges, which facilitate cross-chain transfers, remain a prime target for hackers. Insufficient decentralization and weak multisig thresholds open doors for exploitation.  

Some protocols, like Hyperliquid, are moving towards enhanced validator structures, but the pace isn’t fast enough to quell concerns. As Lucid Labs aptly stated, “The focus should be on fortifying infrastructure, not dismissing researchers.”  

My Personal Strategy  

Given these risks, I’m also using centralized exchanges for now, although I'm a huge fan of decentralization. Security remains my top priority, and centralized platforms often have better protection measures against these vulnerabilities. If you're looking for a reliable platform, here’s my Coinbase referral link—get €10 in BTC when you sign up: https://coinbase.com/join/7KCVZ5G?src=android-link

I think the crypto ecosystem needs to focus more on long-term resilience. Until then, be cautious, diversify your holdings, and always stay informed...  

Let’s discuss: Do you think multisig protocols are the Achilles’ heel of crypto security?

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BreakdownFab
BreakdownFab

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