Stars Arena, a social protocol built on Avalanche, has recovered about 90% of the funds stolen in a security exploit last week, following successful negotiations with the hacker responsible.
On Oct. 7, Stars Arena suffered a major exploit due to a reentrancy issue, which allowed attackers to sell platform tickets — which grant access to individual chat rooms — for inflated prices. The exploit resulted in the loss of over $2.9 million worth of AVAX tokens.
In the aftermath of the attack, Stars Arena issued a warning advising users against depositing any more funds. The team also launched an investigation into the exploit and began negotiations with the hacker.
On Oct. 11, Stars Arena announced that it had reached an agreement with the hacker, who agreed to return 90% of the stolen funds in exchange for a 10% bounty. The hacker has since returned 239,493 AVAX, worth approximately $2.5 million at current prices.
What is Stars Arena?
Stars Arena is a forked iteration of Friend.Tech, an application that allows users to purchase or sell influencer profile tokens that grant access to an individual’s chat room. The pricing of these tokens follows a bonding curve, meaning they become pricier as their demand increases.
Transaction fees on Stars Arena are relatively steep, with a 10% fee on every token sale. Half of this fee is allocated to the project’s team as revenue, and the other half is distributed to users whose tokens are traded.