Blockchain Engineer Alleges Attack Triggered Terra’s $50 Billion Downfall

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Jacob Gadikian, CEO of the blockchain services firm Notional Labs, has recently alleged that Terra’s downfall and UST’s dollar depeg were not caused by Do Kwon, the disgraced founder of the project. Gadikian stated that the real culprit behind this fraud, an unidentified attacker, remains at large.

Blockchain Engineer States Terra’s Attacker Remains at Large, Do Kwon Not Liable for $50 Billion Fraud

Jacob Gadikian, founder of the Cosmos blockchain services provider Notional Labs, has referred to the downfall of Terra, the algorithmic stablecoin project, as a product of chain disruption.

On social media, Gadikian stated that, in his view, the failure of the Terra ecosystem was the consequence of an attack by an unidentified third party. This attack aimed to undermine the Terra blockchain, intending to disrupt the $1 UST peg and profit from arbitrage of the token.

He pointed out that, at the time, the set of validators was under attack and that hundreds of millions were being manipulated for no apparent reason. Gadikian also revealed a video demonstrating an attack on the Cosmos hub security testnet, which produced the same effect observed during the alleged attack that caused UST’s depeg.

Other investigators concurred with Gadikian, stating that during the depeg, the chain registered a sixfold increase in transactions, attributed to bots. According to Flipside, a blockchain intelligence company, these bots “impeded Terra from being able to use its signature economic model to restore its UST peg.”

The described attack was orchestrated from a few addresses, making over 70,000 transactions, all of which failed. This choked the network, as validators could only hold 5,000 transactions in their mempool.

Gadikian’s statements come as Terra founder Do Kwon has been extradited to the U.S. under accusations of orchestrating the fraud that caused losses of nearly $50 billion and led to the dissolution of the Terra project. It remains to be seen whether further investigation might shed light on how this developed, but according to Gadikian’s assessment, the perpetrators of this heist remain at large.

U.S. prosecutors estimate that the number of affected individuals reaches over a million, as Terra’s fall is considered one of the worst disasters in the cryptocurrency world.

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