DeFi protocol Launch Zone was hacked by DND exploiter on Feb. 27, leading to a catastrophic crash in its native token LZ’s value.
Initially, the protocol warned people not to buy its token for the time being and said its team was handling the situation. However, as of press time, Launch Zone has halted trading and transferring of its token until it can resolve the problem.
The token fell from $0.15 to as low as $0.003 before recovering slightly to $0.026 as of press time — down over 80%, according to CryptoSlate data.
The token’s market cap fell to less than $40,000 from over $1 million in a matter of hours as millions of LZ were dumped via DEXs. As of press time, the token’s market cap stood at roughly $250,000.
The exploiter reportedly drained over 80% of the liquidity pool — while the rest was caused by panic selling following the crash.
Data shared by Launch Zone shows the exploiter stole roughly $400,000 worth of LZ and $88,000 in BUSD. However, further investigation revealed that the exploiter made off with roughly $700,000 in total, based on data from blockchain explorers.
It is unclear how many tokens the hacker managed to swap and transfer out before the protocol halted trading.
Meanwhile, Biswap DEX announced it will delist the LZ token until further notice.
The LZ token crash began when someone dumped 9.88 million LZ tokens on Pancakeswap a few hours before Launch Zone announced the hack, according to PeckShieldAlerts.
The blockchain analytics firm further stated that the LZ hack was part of a larger “in-the-wild hack” and asked people to revoke allowance to the bsc address in question.