Chaos surrounded Gala Games on Thursday evening as fears of a rug pull dragged the platform’s native token GALA down by over 25% for a while on 3 November. Panic began to plague the market after a single wallet address appeared to have minted GALA tokens worth around $2 billion out. The affair came to light when the tokens were dumped on decentralized exchange PancakeSwap.
Once the unusual activity came to public notice, the value of GALA tokens to drop. The price went from $0.0394 to $0.0293 over a 120-minute period.
Crypto watchdog, PeckShield, was the first to identify the party behind the mint and flag the issue. The bad actor, pNetwork, provides routing infrastructure for DeFi and gaming tokens, including GALA.
To dispel investor fears, Gala took to Twitter with the aim of reassuring users. Explaining the developments, Gala Games President Jason Brink said that pNetwork was trying to empty the liquidity pool using the newly minted tokens to safeguard itself from a potential vulnerability. He urged investors to not panic and recommended that they stop buying $pGALA on PancakeSwap.
TLDR: Everything is fine. The activity you have been seeing on @PancakeSwap is pNetwork working to drain the liquidity pool. GALA on ETH is completely unaffected.
— Jason Brink aka BitBender (@BitBenderBrink) November 3, 2022
Confirming the development in a separate tweet, pNetwork said that pGALA was not safe anymore. It did, however, mention that funds are safe. The multi-chain routing platform asked users to not transfer or buy/sell pGALA on PancakeSwap, and to prevent an exploit, it even coordinated a white hat attack.
Gala Games, too, confirmed that all user assets on the cross-chain bridge and on Ethereum are completely safe. The network informed the community that it is temporarily halting transaction activity on the bridge.
pNetwork will replace the old and compromised pGALA tokens with new ones that will be sent to users holding them before the attack. That means, all the balances will be restored to the pre-attack status.
Quick updates from both GALA Games and pNetwork helped GALA’s price recover. The token has gained almost 50% from the lowest point of the day.