OP’s price takes 4.5% hit after Optimism faces ‘very high risk’ security concerns

    Issue could have put user funds at significant risk
    OP token fell by 4.57% in 24 hours following the disclosure

L2 projects, specifically Optimism (OP), have been making headlines due to security vulnerabilities discovered in their stack, the foundation for leading Ethereum scaling solutions like OP Mainnet and Base. Offchain Labs, developers of another Ethereum scaling solution Arbitrum (ARB), brought these issues to light.

Today, news headlines highlight concerns about security flaws in Optimism’s (OP) stack, which supports popular layer-2 (L2) networks such as OP Mainnet and Base. Notably, these vulnerabilities were disclosed by Offchain Labs, the creators of another prominent Ethereum scaling project, Arbitrum (ARB).

Optimism avoids major risk

In a blog post published on April 26th, I, as an analyst, discussed the security vulnerabilities identified in the newly-unveiled OP Stack fraud proofs during testing, as reported by Offchain Labs. The relevant evidence for these weaknesses was provided to Optimism’s development team, OP Labs, who subsequently acknowledged the findings.

Reported flaws in the chain allegedly enabled an attacker to manipulate its security in one of two ways: either approving a fraudulent claim through the protocol or denying a valid claim. If this version had made it to the mainnet, user funds could have been significantly endangered due to these vulnerabilities.

Based on information from Offchain Labs, the reported problems with OP Labs have been resolved at the time of writing, and the testnet has also been updated accordingly.

For individuals new to the initiative, OP Labs has been conducting trials on fault proofs in the past few months – a crucial security aspect that forms the foundation of optimistic rollup technology. The L2 chains established on the OP Stack are among the most substantial within the ecosystem, with Base, Blast, and OP Mainnet collectively holding over 48% of the total deposits across rollups, as per AMBCrypto’s analysis based on DeFiLlama data.

OP’s price takes 4.5% hit after Optimism faces ‘very high risk’ security concerns

Realistic or not, here’s OP’s market cap in BTC’s terms

FUD harms Optimism’s OP token

Despite the problem being addressed, the revelation caused considerable fear, uncertainty, and doubt (FUD) amongst OP token owners. Consequently, the cryptocurrency experienced a decrease of 4.57% within the past 24 hours, based on CoinMarketCap’s data.

The feeling towards the cryptocurrency in the market stayed unfavorable, according to AMBCrypto’s analysis based on Santiment’s data. Furthermore, the level of open interest in the futures market decreased, indicating a lack of enthusiasm from traders looking for speculative opportunities.

OP’s price takes 4.5% hit after Optimism faces ‘very high risk’ security concerns

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2024-04-27 23:03