On August 20, a warning urgently issued by blockchain security giant CertiK dropped a bombshell on the cryptocurrency market, as Puffer Finance's official X (formerly Twitter) account was hacked. Users are advised not to interact with any content posted by this account until the issue is resolved.
This is not a simple social media hacking incident. As an important liquid staking protocol, the security of Puffer Finance directly relates to the enormous assets staked by users. Not long ago, Puffer Finance announced that it had completed a snapshot and launched an incentive plan stating, 'For every additional 10,000 ETH deposited, the PUFFER community allocation will increase by 0.1%.'
One. Event sorting, another new wound in the DeFi field where security incidents frequently occur.
1. News has come that Puffer Finance's official website and social media channels have been confirmed to be hacked. This means that attackers may have complete control over the project's official communication channels.
2. They can arbitrarily publish false airdrop information, malicious links, or fake smart contract addresses to lure users into authorizing or transferring funds, resulting in asset loss. This attack method, while simple, is extremely effective, especially for loyal users who trust the project party.
Two. Digging deep into the root cause, CertiK itself is deeply mired in a trust crisis.
1. Ironically, CertiK, which issued this security warning, is itself in the eye of a massive trust storm.
2. Not long ago, CertiK had a public confrontation with the cryptocurrency exchange Kraken. CertiK discovered a series of serious security vulnerabilities on the Kraken exchange, which allowed attackers to receive funds in their accounts without fully completing deposits.
3. However, Kraken accused CertiK's security researchers of not just validating the concept after discovering the vulnerabilities, but instead extracting nearly $3 million in funds, classifying their actions as extortion and even a criminal case.
4. The crypto community subsequently unearthed more dirt. Meir Dolev, founder of Cyvers.AI, pointed out through on-chain analysis that 26 days before the Kraken incident erupted, there were similar withdrawal actions on Coinbase with the same signature hash.
5. Synthetix's Adam Cochran bluntly criticized CertiK as a complete criminal, claiming that their actions have completely deviated from the professional ethics of a security company.
Three. Perspective extension, Puffer Finance at the center of the LSD track.
1. Puffer Finance is not an unknown player. It is situated in one of the hottest tracks in the current DeFi field—liquid staking derivatives.
2. Since Ethereum successfully merged to transition to the Proof of Stake (PoS) mechanism, any user willing to stake 32 ETH can earn about 4% annualized yield by running a validator node. For users without 32 ETH or who do not wish to operate their own nodes, liquid staking services, or Liquid Staking Derivatives (LSD), have emerged.
3. Users can deposit any amount of ETH into protocols such as Lido to receive stETH or RocketPool to receive rETH. These protocols will use the pooled ETH for staking and issue users a derivative token representing staking rights. This derivative token not only accumulates staking rewards but can also be freely invested in the entire DeFi ecosystem for secondary mining to seek higher returns.
4. Puffer Finance is one of the participants in this field. This security incident undoubtedly casts a shadow over the entire LSD track, especially the emerging concept of re-staking.
Four. Industry reflection, the fading halo of security audits and the reconstruction of trust.
1. CertiK, a security audit company with a luxurious roster of investors including Goldman Sachs, Tiger Global, and SoftBank, was once the preferred choice for many projects seeking security endorsement.
2. However, there has been sharp criticism in the community, suggesting that not all audits by CertiK lead to scams, but most scams have undergone CertiK audits. Although this statement is extreme, it reflects part of the market sentiment.
3. The Puffer Finance incident once again presents a harsh reality: even protocols that have passed audits and appear secure may have undiscovered vulnerabilities or become targets of social engineering attacks. Security audit reports should not be seen as absolute guarantees of security but more like a health check at a specific point in time.
Five. Response strategies, how investors can protect their assets during a crisis.
For ordinary investors, it is crucial to protect the safety of their assets in such events:
Pause interaction: Immediately suspend interactions with any links, applications, or smart contracts mentioned by Puffer Finance's official X account.
Verify information: Cross-verify any important news through multiple official channels such as Discord, Telegram, and official blogs, and do not blindly trust information from a single source.
Beware of phishing: Remain highly vigilant against any messages claiming to provide 'compensation,' 'special airdrops,' or requesting you to urgently authorize wallets or enter seed phrases.
Review authorization: Regularly use tools like Revoke.cash to check and revoke unnecessary old smart contract authorizations.
Security is the cornerstone of DeFi, not an option. Whether it's CertiK's moral hazard or Puffer Finance's management loopholes, they remind us that in this decentralized world where high returns coexist, the temporary noise will eventually fade, and only security and trust will last forever.
