Is block.one supporting EOS price as issues mount after EOSBet hack?

Cryptocurrency market cap is clinging onto $201 billion market cap as the recovery stalls with EOS and Bitcoin Cash off 2 and 3% respectively. Most alts are shedding the ounces today, with worst performers among top coins seeing Tezos down 5% and Nano 8% lower, although it is still nearly 20% up on the week. Bitcoin is steady.

Ethereum has been unable to hold its near-term high of $220 seen a couple of days ago.

Currently at $217, ETH’s descent has been arrested for now, with an injection of volume in the bounce from as low as $167 visited earlier this week. On the 5th,  6th and 13 and 14th of September volumes spiked above $2 billion.

Ethereum is 0.76 higher in the past 24 hours, while most other alts are retrenching.

EOSBet smart contract hacked

EOS, trading at $5.35, is worthy of a mention on a number of counts.

DEOSGames and EOSBet have both been reportedly hacked this past week.

A vulnerability in a piece of code that is probably used by a number of game projects means a false call can be sent to the game app wallet to transfer funds.

EOSBet is based on the open source EOS game app Fair Dice. In turn, DEOSGames is a clone of EOSBet.

On 11 September DEOS Games reportedly lost $26,000 of tokens. The project says the money was won legitimately by a lucky gambler.

On 14 September, after some crowing by BetEOS at the troubles to befall its much smaller competitor, also found itself denying it has been hacked after a user had “won” $600,000. The winnings in both cases were of a type where the winning doubles as part of a succession of linked bets, sometimes known as an accumulator.

EOSBet issued a statement yesterday clarifying earlier statements made to thenextweb website.

The code has now been patched but EOSBet warns that other projects will also likely be using the flawed code.

It seems a rookie error is to blame, with three “OR” logical operators coded as part of the test for a valid token transaction request. Only one object returning true is enough for the code, including “is a valid token transfer request”, to execute.

It is not clear from the statement however whether the original $600,000 reported to have been won is involved. The attackers sent out messages after their initial break-in telling game users where they could get “refunds”.

This, and the Trybe fiasco – albeit on its testnet – where the project was able to see users’ EOS account details, adds to the mounting woes of the EOS community.

Although it could be argued that the EOS protocol sould have been designed in such a way as to prevent such badly written code executing, it is a fault ultimately of the developers at EOSBet, and presumably elsewhere, who wrote the smart contract.

The episode underlines the fact that the “work in progress” sign is still hanging on the EOS storefront.

Indeed, these difficulties are symptomatic of the wider disarray of the network, with its RAM costs and governance issues.

One result of all this is probably to speed the development of multiple EOS chains, with those with a project in production already in that path

So it is easy to forget though amidst all that noise, some progress is being made, as established projects deploying the protocol such as Everipedia, the blockchain-based online encyclopaedia, see smooth launches.

Perhaps that’s why the EOS token price has been holding up better than many of its altcoin peers.

Is block.one conducting open market operations to support EOS price?

There is another theory thoughA to exchange lain the strength: Block.one, the company that developed the network, is buying EOS.

Okay, why would they want to do that when they are already the single largest holder of EOS?

Well that’s exactly why.

Being big holders of EOS, with 10% (100 million) of total supply, block.one is also ETH rich.  Remember the $4 billion it raised in the ICO? Those tokens were mostly bought with ETH.

So block.one offloads some of its ETH reserve, the price of ETH falls (ok, it was doing that anyway) and the price of EOS is strengthened.

Alternatively, by selling ETH into a falling market block.one is adding fuel to the bearish fire in crypto and reducing the value of its Treasury.

That may be so, but the effect is to undermine, unwittingly or otherwise, the Ethereum price.

After all, EOS is meant to be the ETH killer.

About the Author

Jennifer Collins
Jennifer has been writing about crypto since 2016 when she first got interested as a student at Queen Mary University in London. You can email me here: jennifercollins@coinintelnews.com

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