A crypto user, known as Tempe.degen, has faced a significant loss of assets during a cross-chain transaction. The user lost 90% of his holdings, amounting to 785,000 DEGEN, due to poor liquidity and substantial slippage. This incident has sparked a wave of concern within the crypto community about the safety and reliability of cross-chain transactions.
The problem arose when Tempe.degen tried to move DEGEN from its original chain to Base. Before completing the cross-chain transaction, DEGEN assets must first be converted to ETH on the DEGEN Chain. These assets then move to Base, where they are converted back to DEGEN before reaching the user’s address. During this process, low ETH liquidity in the DEGEN/ETH pool caused significant slippage, resulting in the asset loss.
Tempe.degen pointed out that the wrong bridge was used, and the user interface was unclear, which contributed to the unfortunate outcome. This incident highlights the complexities and risks involved in cross-chain transactions. Poor liquidity is a major issue for some pools, prompting DeFi founders to seek solutions for improving the overall situation.
The loss experienced by Tempe.degen has led to a broader discussion within the crypto community about the safety and security of cross-chain transactions. Enthusiasts have noted that such losses could hinder the sector’s growth. Negative sentiments from similar incidents could affect market confidence and slow the adoption of cryptocurrencies.
In response, the company behind the DEGEN Chain acknowledged the issue and assured affected users of a full refund. A spokesperson stated, “Bugs like this should never happen, especially when user funds are involved. If you’ve faced a similar problem, we’ll create a form to ensure everyone gets refunded.”
The company also took responsibility for the incident, citing poor service from providers involved in the process. They assured the community that changes to improve the platform’s reliability would be implemented soon. These changes will include a shake-up in the coming weeks to secure the best possible service.
This incident underscores the need for improved security measures and liquidity management in cross-chain transactions. As crypto adoption grows, ensuring the safety and confidence of investors is crucial for fostering wider market growth. Poor liquidity and inadequate bridges have caused substantial losses, prompting calls for better security measures. The company’s swift response and promise of reforms aim to restore user confidence.
