Cronos Blockchain Shut Down After $75 Million Hack on Tectonic

The Cronos blockchain, launched by Crypto.com in 2021, was shut down on Sunday after an attack on Tectonic, its largest lending protocol. Preliminary losses are estimated at around $75 million.

Tectonic allows users to deposit cryptocurrencies as collateral and borrow other assets against them. The attacker exploited the platform's vulnerability to price manipulation by using TONIC tokens, which had a 20% collateral factor. This meant that every $100 of token value could support roughly $20 in borrowing.

The impact was significant, with Tectonic's capital locked in the protocol falling from around $121.7 million on August 26 to approximately $3 million by Monday. The shutdown raises questions about Cronos' resilience and degree of decentralization.