Hedera is turning off access to most services, as announced in a tweet on March 9.
Hedera is blocking wallet, app access
Hedera said that it will turn off network proxies on its mainnet as it investigates irregularities in its smart contracts. This action means that wallets, decentralized exchanges and decentralized apps, and centralized exchanges will not be usable.
The project said that its mainnet remains operational and is reaching consensus on new blocks. Instead, the network is similarly inaccessible to most users. The project said that it will re-enable access and proxies when the issue is resolved.
Hedera said that it is taking this action “in an abundance of caution for users.” The project has not stated whether any funds have been lost or stolen.
The decision has already attracted criticism from users, who have questioned the project’s commitment to decentralization. The fact that Hedera has leveraged proxies seemingly single-handedly suggests that just a few parties have control over the network.
Hedera fully controlled the proxies when they were launched in 2020. However, it also said that it plans to provide control to council members at a later date.
Decision is result of earlier developments
Heder confirmed that it is experiencing smart contract issues earlier on March 9. The bridge service Hashport also paused its services to help contain the issue.
Hedera gave little information about the nature of the issue. However, independent blockchain researcher Ignas reported that the issue is related to the decompiling process of smart contracts and said it specifically affects the Hedera Token Service (HTS). This means that liquidity provider (LP) tokens and wrapped tokens are affected.
Ignas cited Justin Trollip, CEO of Pangolin Exchange, as the original source of that information. Trollip said that Hedera projects such as Pangolin, SaucerSwap. Heliswap, and others are also at risk. Trollip advised users to “get [their] funds out now” — advice that was later repeated by Pangolin in an official capacity.
Hedra (HBAR) was down 6.2% over 24 hours as of 12:45 a.m. UTC on March 10. It has nevertheless performed better than Bitcoin, which was down 7.4% over 24 hours.