Postmortem Analysis: Exploitation of the Cycle on Our Site
Shardeum Network Resolves Reward Exploit, Thanks to Community Efforts
In a recent development, the Shardeum network has successfully resolved a security incident that occurred in July 2025. This incident, involving a reward exploit that led to the creation of approximately 500,000 SHM tokens, has been traced back to a bug in the cycle certificate validation process.
The issue was identified after an investigation following the incident. The resolution involved fixing the certificate validation bug, which restored the proper functioning of staking reward distribution and prevented further incorrect token issuance. The network team likely implemented code corrections and updated validation checks to close the exploit.
The attack was traced to cycle 111165 and involved the use of two crafted service queue transactions with backdated cycle numbers and extra fields. The incident was confined to this specific validation flaw related to staking rewards on the Shardeum network.
The attack was isolated and no further impact was found across the network's history. On July 12, 2025, a suspicious staking reward was reported to the network team via their Discord server. The attacker's record was selected through consensus scoring and resulted in an abnormal reward credit of 502,692.05 SHM. Interestingly, all the SHM received through the exploit was voluntarily returned by the attacker.
Details of the SHM burn, including the transaction hash and date, were appended on July 31, 2024. As a precautionary measure, a mandatory security patch, Validator v1.19.3, has been released to correct the underlying flaw and implement additional defensive checks. Validators are advised to ensure their nodes are running the latest patched version.
Credit for the quick resolution goes to community member NoviceCrypto and others involved. In recognition of their efforts, a Security Incident Response Playbook will be formalized and published. To foster a culture of security, a bug bounty program will be announced to encourage responsible disclosure of vulnerabilities.
Moreover, a public security email list will be launched for developers, node operators, and community members. If you identify a potential security issue, you can report it via email, Github, or Discord, and should not post exploit details publicly until acknowledged by the security team.
Regular SHM holders are not affected by the incident and no action is required. External monitoring and alerting tools, such as anomaly detection and on-chain analytics, are being evaluated for integration to enhance the network's security measures.
This incident serves as a reminder of the importance of vigilance and community involvement in maintaining the security of a blockchain network. The Shardeum team appreciates the support and cooperation of its community in addressing this issue.
- The successful resolution of the reward exploit on the Shardeum network highlights the significance of community efforts in the technology industry, as community member NoviceCrypto played a key role in identifying and resolving the issue.
- The incident underscores the need for education and self-development in the field of cybersecurity, as understanding complex validation processes is crucial to detecting and preventing potential exploits.
- In finance, this event emphasizes the importance of general news and responsible reporting, as it allows the public to stay informed about security incidents and potential risks in their personal-finance investments.
- The sports analogy can be drawn here, as the swift resolution of the exploit demonstrates the importance of teamwork and strategic planning, much like a successful team in any sport.
- Moving forward, the Shardeum team plans to launch a public security email list and establish a bug bounty program to encourage responsible disclosure of vulnerabilities and foster a culture of security within the business community, promoting a safer and more secure environment for all.
