Crisis of Confidence Triggered by the GALA Incident: Dispute Between pNetwork and Huobi

Recently, an eye-catching event occurred in the cryptocurrency circle, involving a conflict between the pNetwork project team and a well-known trading platform. This event not only exposed potential risks in the decentralized finance ( DeFi ) ecosystem but also raised questions about the operational methods of centralized exchanges.

The cause of the incident is that pNetwork took a controversial measure to recover about $400,000 in liquidity funds by issuing 55.6 billion pGALA tokens. This action was referred to by the project party as a "white hat attack," but during its execution, they failed to effectively communicate with the relevant trading platforms, resulting in a large number of issued tokens being deposited and traded on the platforms.

This operation triggered chaos in the market: some investors seized the opportunity to arbitrage, while others unknowingly purchased the devalued pGALA tokens. The actions of pNetwork not only demonstrated its lack of understanding regarding DeFi security but also exposed its shortcomings in crisis management. In the aftermath, the project team did not explain the increase in the engine and the potential insider trading, but instead became embroiled in mutual accusations with the trading platform.

In the face of this crisis, the handling of a well-known trading platform has also been heavily criticized. The platform failed to promptly suspend the deposit and withdrawal services for the related tokens, and the response speed and effectiveness of its risk control system have been called into question. There are even rumors suggesting that internal personnel may be involved. The subsequent measures taken by the platform, such as categorizing all users involved in trading as "arbitrage attackers" and freezing related assets, have further intensified user dissatisfaction.

This incident also reflects the participants in the cryptocurrency market's insufficient awareness of risks. Many investors blindly follow trends without sufficient understanding, underestimating the potential risks involved. In this area where regulation is still not完善, users need to be more cautious and enhance their risk awareness and judgment capabilities.

It is worth noting that the typically active blockchain security companies were collectively silent during this incident. This highlights that while current security audit services can identify code vulnerabilities, they struggle to prevent and respond to crises caused by human factors.

The losses caused by this incident are estimated to be as high as $250 million, but more concerning is its potential impact on the reputation of the related platforms and user trust. This incident may become an important chapter in the history of cryptocurrency, reminding people to rethink the nature and challenges of decentralized finance.

As practitioners and observers in the blockchain field, we have a responsibility to objectively analyze such events to promote the healthy development of the industry. Although the cryptocurrency market is fraught with risks and uncertainties, through continuous learning and improvement, we will ultimately establish a safer and more transparent financial ecosystem.