Avoiding Infinite Mint Attacks in Crypto
Infinite Mint Attack is an attack in which an unwanted entity or hacker mines an absurd (“infinite”) number of tokens within a protocol.
What is Infinite Mint Attack?
Infinite Mint Attack occurs when an unwanted entity or hacker mines an absurd number of tokens within a protocol, increasing its supply to an unhealthy amount, which in turn decreases the value of each token. Often the hacker throws all the mined tokens onto the market, causing prices to collapse. Typically, this process happens quickly, and attackers take millions of dollars worth of tokens for themselves.
Because of security gaps that allow hackers to exploit code bugs and vulnerabilities, blockchain systems become vulnerable to this type of attack. In the Cover Protocol attack, hackers used shield mining contracts – this allowed them to obtain unauthorized cryptocurrencies from the protocol.
The hacker managed to use 40 quintillion tokens on the Cover stub fund – this caused its price to drop by 97%. In this case, the attacker liquidated more than 11,700 coins and embezzled tokens worth about $5 million.
Unfortunately, the checks cannot guarantee the full security of the protocol.