The recent security breach suffered by the social media application Stars Arena has resulted in commendable recovery efforts. The application announced on the X platform (formerly known as Twitter) that it has recovered approximately 90% of the misappropriated funds. This restoration is the result of a four-day on-chain negotiation with the hacker.
Stars Arena, operating on the Avalanche network, offers users the opportunity to acquire “shares” of renowned content creators, a mechanism that unlocks exclusive content and privileges. Its modus operandi is parallel to that of Friend.tech, another platform operating on the Base network.
The Hack and the Diplomacy that Followed
On October 5, the application was hacked. Although there was an initial divergence between user claims of losing over $1 million and the application developers estimating it to be around $2,000, the proactive approach of the team remained consistent. Faced with this breach, the vulnerable smart contract was updated, and the application was relaunched promptly with reinforced code on the same day of the breach.
A significant breakthrough in the negotiation occurred on October 7. An on-chain message from the official Stars Arena contract, Stars Arena: Shares, hinted at a deal: return the funds and receive a white hat reward of 5%. Although the hacker initially did not respond to this proposal, the dialogue progressed with an interest in collaboration.
The on-chain dialogue that followed between the Stars Arena team and the hacker was not without challenges, such as the inability to communicate through the Blockscan chat application due to activated anti-spam features. However, at 21:21, an agreement was reached, with the hacker agreeing to retain a 10% bounty.
At 21:43, Stars Arena happily announced on X that 90% of the misappropriated funds had been successfully recovered, excluding 1,000 AVAX tokens lost in an interchain bridge. With an initial loss of 266,104 AVAX (approximately $2.4 million) and a recovery of 239,493 AVAX (approximately $2.2 million), the effectiveness of the negotiation became evident.
