Crypto assets are not as safe as they are presented to be. From 51% attacks, tainted wallet addresses and faulty smart contracts, to outright dangerous tokens with a backdoor to be taken away - there are now more points to perform due diligence.
Recently, a backdoor was discovered for Soarcoin (SOAR), which led to a discussion of other assets harboring a similar threat.
https://twitter.com/ncweaver/status/1004092167592132608
The backdoor feature allowed for a large payment in SOAR, which was later withdrawn from the wallet. After a business conflict between Soar Labs and Byte Power Party Ltd., the paid sum equivalent to $6.6 million went missing from the counterparty’s wallet. The payment in SOAR was intended for an acquisition deal.
This goes against to the principle that crypto transactions are irreversible and tokens owned are inaccessible. Instead, the smart contract meant ownership of the tokens was not transferred irreversibly. For instance, the Bancor protocol has a known back door allowing the team to produce or freeze tokens, or reverse trades. But the team has explained this approach is necessary to make the rather complex trading system work smoothly.
Soarcoin launched this may, with sub-penny prices, reached a peak at $0.06 right after the ICO, and slid gradually to the current levels at $0.02. The only exchange that trades SOAR is Livecoin.
!SOAR!
The case of Soarcoin underlines the dangers of smart contracts, which are not understandable to the wide public. Unaudited smart contracts contain dangers or intentional backdoors that may lead to losses. Currently, there is a limited marketplace for cryptocurrency audits, with Hosho being one of the leading startups. Hosho has warned of possibilities for backdoors in smart contracts.
Soarcoin is a relatively inactive network, with just 921 addresses and only a handful of transactions each day. Luckily, the damage would be very small - however, some believe other tokens among the thousands of digital assets may be tainted.
This article appeared first on Cryptovest
