Oyster (PRL), a cryptocurrency based on smart contracts, faces an unfortunate destiny when its anonymous creator allegedly went ballistic, breaching the coin’s own smart contract in order to sell a new stash for profit.
Oyster “Smart” Contract
Oyster is a cryptocurrency project that offered customers the possibility of storing files in the IOTA tangle. Users could spend their PRL to store files in cloud mining. Oyster did have a working product, and things were seemed to be going as intended.
Yesterday something started happening that caught the people of the project off guard. The price of the currency was starting to fall aggressively, and nobody knew why. Shortly after, the team and users were found the answer.
Supposedly the smart contract that enables the functionality of this cryptocurrency was written by an anonymous individual, Bruno Block. Bruno was the one that developed the whole idea of storing archives on the IOTA tangle. Think of Bruno as the Satoshi Nakamoto of Oyster.
Bruno supposedly tinkered with the smart contracts system that he himself designed, issuing Oyster cryptocurrency similar to the rate at the beginning of the ICO sale. He produced tons of Oyster apparently to be dumped in the market. It dumped so hard that the price fell more than 60% in a single trading day.
How Did This Happen?
Supposedly Bruno Block, the anonymous smart contract creator was the only one that could restart the ICO sale to issue a new number of coins, thus taking advantage of a vulnerability on the contract itself. A method called DirectorLock was set to false, and supposedly that allowed Bruno to start another ICO. This was discovered by the user Infernal Toast on a reddit thread.
The problem with smart contracts is that every one is different, and there is no standard to follow when writing one. Obviously, this smart contract was flawed since day one, and this vulnerability was probably placed by the same Bruno in order to take advantage of it later.
But the responsibility of this should also fall onto the organizers of the project. They probably should have been aware of the vulnerabilities. Still, in their Medium blog post concerning the issue, they claim their smart contract passed three audits, and that no bugs had been found.
Alternate Theories, Damage Control
The official version is that Bruno Block was the sole perpetrator of the actions that led Oyster to the disaster, and he did it because of a timing issue. The Medium post explains, “After our initial review, we are inclined to believe that these were solely the actions of Bruno Block and that he did this now to avoid detection from KuCoin KYC deprocedures (that will be implemented on November 1st).”
So maybe he planned to do it at a later date but KuCoin’s update made him make haste and perform this action sooner. While this is the official version, there are other versions that derive from the fact no one knew Bruno.
A 4chan post explains that Bruno could be a dev team group, seeking to make a quick buck, arguing that the head of a cryptocurrency project with millions in market cap would not perform this scam for a paltry $300K.
Magical World of Altcoins
Anonymous programmers writing smart contracts, and a team accepting this; anonymous withdrawals of more than $300K on a supposedly regulated exchange — these are the very reasons so many people stay far away from investing in cryptocurrency projects.
The best advice for avoiding disasters like that is research, supporting strong, well-referenced cryptocurrency projects in the market. It seems like Oyster will continue functioning as a project, but the real question is how many people will keep trusting in them after this?
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