Solana Liquidity Hub Serum Will Be Split After a Probable Breach in the FTX System

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Last Updated on November 14, 2022 by Bitfinsider

Solana developers are forking the FTX-developed token liquidity hub Serum following a possible FTX attack.

On Friday, an unlawful withdrawal of more than $400 million was made from FTX by a hacker. The situation aggravated the exchange’s financial woes, causing it to seek Chapter 11 bankruptcy protection.

Numerous Solana developers think that the breach may have also compromised Serum, a well-known protocol created by FTX and utilized by numerous Solana blockchain applications.

Today, developers are scrambling to fork Serum’s code and resume the protocol without the involvement of FTX, according to Solana’s founder, Anatoly Yakovenko. Because the original Serum can only be upgraded using a private key controlled by FTX and not the Serum DAO, developers require a new version. This key may have been compromised as a result of the FTX breach.

“As far as I know, the serum developers are forking the program because the upgrade key to the current version has been hacked,” Yakovenko stated.

“The serum program update key was not managed by the serum’s own organization, but rather by a private key associated with FTX. “At this time, nobody knows who has this key and therefore has the ability to update the serum program, potentially deploying malicious code,” a developer with the alias Mango Max said, adding that he is directing the Serum fork project.

Several Solana applications that are known to depend on Serum have began restricting their exposure. Due to security concerns, Jupiter, the largest DEX aggregator exchange on Solana, informed its users that it was suspending the usage of Serum’s liquidity.

“Confirming that we disabled Project Serum as a liquidity source a few hours ago owing to security concerns regarding upgrade authority, we urged all of our integrators to do the same,” Jupiter added.

Due to security concerns, more projects, including Magic Eden, Mango Markets, and Phantom, have announced they will no longer rely on Serum for liquidity and have suspended its use.

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