Following a recent hack incident, Nexera Protocol has burned 32.5 million NXRA, its native cryptocurrency. This initiative is a move toward ensuring the protocol’s stability and integrity after the hack.
The protocol said the move is a broader measure to salvage the situation and restore security. Blockchain security firm PeckShieldAlert revealed this in an X post, noting that none of the affected 32.5 million NXRA tokens is in circulation.
Nexera Explains Reasons for Burning its Tokens
To counter the negative impact of the recent breach, Nexera utilized its official account on X to explain its steps in addressing the issues. According to the update, the Nexera team conducted crucial technical investigations, which revealed that the hack did not affect the smart contracts.
The team reacted quickly and froze the 32.5 million NXRA tokens in the hacker’s wallet. Also, they found that only $440,000 of the transferred tokens were significantly affected.
Burning the 32.5 million NXRA tokens was necessary to maintain Nexera’s ecosystem. It means that the stolen tokens have become useless. Hence, the attacker cannot trade or circulate them in the market, negating the potential impact.
The Hack Incident That Compromised Nexera’s Tokens
On August 7, a hack attack targeted Nexera via a smart contract security breach. The attack caused Nexera to lose $1.5 million in crypto assets, including Nexera’s native cryptocurrency, NXRA tokens.
The Hacker stole 47 million NXRA tokens, worth about $1.76 million at the time of the attack. However, Nexera estimated the overall loss to be around $1.5 million.
Immediately after the theft, the hacker sold some tokens in exchange for Ether (ETH). They also moved some of the stolen funds to the BNB Chain.
Meanwhile, Nexera protocol provided updates revealing that the breach was part of a broader, well-planned attack targeted at multiple projects and protocols.
Despite the breach, Nexera has decided not to issue a new NXRA token. It will also continue using the existing token with the same address to maintain continuity for crypto users holding the tokens.
Furthermore, Nexera advised its users to stop all trading activities with the token. It explained that the hackers had toiled with exploit-related addresses on KuCoin and MEXC Exchange.
As a result, these exchanges have temporarily suspended operations, including withdrawals, deposits, and trading. Nexera also updated other exchanges to do the same.
The attack on Nexera followed after hackers breached WazirX, an Indian cryptocurrency exchange, causing it to lose more than $230 million. The WazirX breach marks the second-largest crypto hack since the start of 2024.
Hacks and fraud have remained a significant issue plaguing the crypto industry. An Immunefi report revealed a 112% increase in crypto hacks in Q2 2024, with around $572.7 million lost to these exploits.
According to the blockchain security firm, the crypto industry lost over $1.27 billion to hacks across 168 incidents since 2020.
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