Launch Zone has stopped trading and transferring of its native token LZ until further notice after hack drains 80% of the liquidity pool.
Launch Zone, a DeFi protocol, was compromised on February 27 by a DND exploiter, which caused a catastrophic decline in the value of its native token LZ.
The protocol initially issued a warning not to purchase its token for the time being and stated that its staff was in control of the situation. Yet as of the time of publication, Launch Zone has stopped trading and transferring its token until it can find a solution.
According to data from CryptoSlate, the token dropped from $0.15 to as low as $0.003 before marginally recovering to $0.026 as of press time. This represents a decline of over 80%. As millions of LZ were dumped via DEXs, the token’s market cap dropped from over $1 million to less than $40,000 in a couple of hours.
At the time of publication, the token’s market capitalization was around $250,000.Almost 80% of the liquidity pool was purportedly drained by the exploiter, with the remaining 20% being a result of panic selling after the crash.
Launch Zone’s data reveals that the exploiter took $88,000 in BUSD and almost $400,000 worth of LZ. But, subsequent research found that, according to information from blockchain explorers, the exploiter made off with almost $700,000 in total.
How many tokens the hacker was able to exchange and send out before the protocol stopped trading is unknown. A delisting of the LZ token has been published by Biswap DEX until further notice.
According to PeckShieldAlerts, the LZ token crash started when someone dumped 9.88 million LZ tokens on Pancakeswap a few hours before Launch Zone disclosed the attack.
The blockchain analytics company also alleged that the LZ hack was a component of a broader “in-the-wild hack” and urged users to cancel access to the questioned bsc address.