Lido Finance shows 20 incidents of downtime due to authentication configuration issues
Ethereum staking protocol Lido Finance has announced that the protocol has seen 20 transaction events due to its serial infrastructure and validators powered by Launchnodes.
The incident occurred on October 11 at 3:30 pm UTC, Launchnodes said. In X's October 11th post, Lido stated that the Lanchnodes validator nodes are now offline and the hack has stopped while the cause is investigated.
The attack was carried out on the Ethereum blockchain and Lido estimated the result to be 20 Ether (ETH) worth $31,000 plus additional fines, as well as inactivity penalties that accrue when the validators are offline for troubleshooting.
20 outages have occurred with @launchnodes node operators dealing with authenticators working as part of the Lido protocol.
Launchnodes and DAO contributors are investigating.
The verifiers are offline and interception has stopped while the cause is investigated.
— Lido (@LidoFinance) October 11, 2023
Slashing is the process by which a validator violates the rules of a blockchain's proof-of-concept agreement, often leading to the removal of that validator or cutting off a portion of the staked-Ether they have pledged.
In post hours, Launchnode said the hacking incidents were caused by infrastructure and signer configuration issues.
“We are investigating, and taking steps to prevent further incidents and restore full service,” the forum added.
Related to the 5:30pm CET incident of Lido Protocol Launchnodes authenticator nodes going down: The problem has been identified, and is related to an infrastructure and Web 3 signer configuration issue. We are investigating, and taking steps to prevent further incidents and…
— Launchnodes (@launchnodes) October 11, 2023
Lido said stakeholders on the protocol will not be affected except for the reduction in daily rewards, which will be reflected in the next reset on October 12.
The stake provider also confirmed that Lido DAO has a 6,230-staked-ETH insurance fund worth $9.5 million that will be used to mitigate the impact of the downturn — but by design it won't start automatically.
Lido added that stETH owners will be compensated after a “coverage mechanism” is determined, while Launchnodes has promised to reimburse Lido for all losses.
Related: Ethereum staking services agree to 22% limit for all validators.
Liquid Stacking Protocol The process is not automatic because it is impossible to know in advance what the total loss will be.
Lido is by far the largest liquidity protocol, with a total value of $13.8 billion locked up in the protocol, Defilama said. The next largest pool is Rockets at $1.7 billion.
Only 226 validators (0.04% of all validators) were cut in the Ethereum ecosystem from December 1, 2020 to the end of February 2023.
Magazine: Defy Father, Hall of Flames: Ethereum is ‘unfortunately' more powerful.
