Why Flow Token Is Declining Despite The Growth Of The Crypto Market.
FLOW has broken out of the broader market recovery, with the token experiencing a double-digit decline over the past 24 hours.
The failure comes as the network continues its recovery efforts after a recent exploit.
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Why is the price of FLOW Token decreasing?
The crypto market rose 2.3% today, with all of the top 10 assets trading in the green. Bitcoin (BTC) rose above $90,000, while the price of Ethereum (ETH) also rose above $3,000.
However, FLOW did not benefit from the market-wide rally. Data from BeInCrypto Markets shows that the altcoin is down nearly 14% in the past 24 hours, making it the second biggest daily loser on CoinGecko.
It should be noted that the decline is not limited to today. Like the broader market, FLOW has faced challenges over the past few months.
But the fallout worsened after the network suffered a security breach on December 27. The price fell more than 50% in one day, hitting a new all-time low of $0.079 on Binance. Leading South Korean exchanges, Upbit and Bithumb have blocked FLOW deposits and withdrawals
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“Flow (Flow) has been designated as a commercial caution asset by member exchanges of the Digital Asset Exchange Association (DAXA). Flow (Flow) deposit and withdrawal services have already been suspended. When the services resume, only withdrawals will work again. The resumption of the deposit service will be announced later in the process following the trade caution designation. “Appbit Translation
Flow Foundation Moves to Recovery Phase After $3.9 Million Exploitation
On December 27, an attacker exploited a vulnerability in the execution layer and moved approximately $3.9 million worth of assets off the streaming network. The team contained the incident preventing further losses.
The Flow Foundation emphasized that the incident will not affect existing user accounts.
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“The guaranteed funds released represent a manageable amount that does not threaten network solvency or users' funds. The priority is upgrades and a safe restart,” the foundation wrote.
Initially, he proposed to restore the network to the checkpoint it was in before the flow was exploited. However, after receiving substantive feedback from the certifications and the developer community, the foundation revised its approach and introduced a new update plan.
The approach avoids network reconfiguration or reconfiguration, aiming to preserve legitimate user activity. According to the foundation, more than 99.9% of accounts remain intact and will be fully serviced upon restart.
“Accounts identified as recipients of forged tokens will be temporarily restricted as a precautionary measure during network restarts…. The FlowCore development team is proposing a software update for node operators. This software update will allow the Community Management Council to temporarily fix fraudulent assets,” he wrote.
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The foundation then announced that verifiers had approved the software update, and the network had moved into an update and testing phase. As part of the downstream network restoration plan, Phase 1 is scheduled to begin at 6 a.m. PT.
At that point, Cadence's environment will return to normal, while accounts affected by the attacker's poisoning activity will remain temporarily restricted.
The EVM environment will also be restricted to read-only mode. According to the Foundation, more than 99.9% of Cadence accounts are fully serviced at this level.
This development reflects the group's continued push to restore normal operations, although it is uncertain whether the recovery process will be sufficient to rebuild market confidence and support price recovery.
