How much was lost in the Paid Network hack?

The Paid Network hack resulted in $27.4M in losses on March 05, 2021.

What attack technique was used in the Paid Network exploit?

The Paid Network exploit utilized Infinite Mint and Dump / Other. Understanding this attack vector is critical for smart contract auditors and developers building secure DeFi protocols.

How can developers prevent similar smart contract attacks?

Preventing smart contract hacks requires a combination of secure coding practices, thorough security audits, and understanding common attack vectors like reentrancy, oracle manipulation, and access control flaws. Smart Contract Hacking (SCH) provides hands-on training to help developers and auditors identify and prevent vulnerabilities before deployment.

Paid Network Hack

TOTAL LOST $27.4M

High #184 All-Time Mar 05, 2021 Infinite Mint and Dump / Other ethereum

Affected Chain ethereum Incident surface

Recovered - No recovery reported

All-Time Rank #184 By amount stolen

Auditors 1 Prior security audit

Incident Overview

Quick Summary

External wallet exploited ProxyAdmin contract to mint new tokens and sell them off.

Details of the Exploit

The contract deployer transferred the ownership to an external address through the ProxyAdmin contract by calling the newOwner() function. The external wallet then invoked the mint() function to generate new tokens in his wallet. These tokens were then sold off in a series of transactions.

Block Data Reference

The transaction of ownership transfer:

https://etherscan.io/tx/0x733dd279…2b33d9

The transaction of minting new tokens:

https://etherscan.io/tx/0x4bb10927…7555a0

The transactions of selling off the tokens:

https://etherscan.io/address/0x18738290…cd65be#tokentxns

The deposit of stolen funds to the Tornado Cash mixer:

https://bloxy.info/txs/calls_from/0x18738290…cd65be?signature_id=994162&smart_contract_address_bin=0x722122df…5b6967

Incident Report

Protocol / Project Paid Network

Date of Incident March 05, 2021

Affected Chain(s) ethereum

Attack Technique Infinite Mint and Dump / Other

Classification Rugpull / Other

Primary Source View Post-Mortem

Protocol Information

Protocol Type Yield

Affected Token PAID

Official Website paidnetwork.com/

Protocol Twitter/X @paid_network

Team Anonymous

Source Code Unverified

Market Context at Time of Hack

Protocol Links

GitHub Discord

What the Attacker Needed to Succeed

Understanding the prerequisites for this type of attack helps auditors identify protocols that are most at risk and helps developers build better defenses.

Technical Knowledge Deep understanding of infinite mint and dump / other and Solidity and EVM internals

Capital Required Seed capital to cover gas and initial position setup

On-Chain Access Ability to interact with ethereum smart contracts and deploy a custom exploit contract

Protocol Analysis Identification of the exploitable vulnerability in Paid Network's contract logic - root cause: rugpull / other

Execution Speed Precise transaction ordering and timing to exploit the vulnerability within a single atomic block

Obfuscation Plan A strategy to launder and move stolen funds - typically through mixers, cross-chain bridges, or decentralized DEX swaps to resist tracing

What Auditors Should Check

Could this have been caught in audit? Likely — with a thorough Infinite Mint and Dump / Other audit checklist and test coverage

Audited by Audit Report 1 — still lost $27.4M. Prior audits don't guarantee safety, especially after post-audit code changes.

If you're auditing a protocol with similar architecture to Paid Network, these are the critical security checks that could have prevented this incident (March 2021).

Verify all logic paths related to Infinite Mint and Dump / Other are guarded by proper access controls and input validation
Review privileged functions (owner, admin, governance) for potential abuse vectors - centralization risks should be documented and bounded with timelocks or multi-sigs

Master these auditing techniques with hands-on labs and real exploit scenarios in the Smart Contract Hacking course.

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Security Audit History

Audit Report 1 Report

Proof-of-Concept Exploits

1 PoC available

poc-exploits - paid network

$ Paid Network Private key compromised

On-Chain Evidence & References

Post-Mortem https://paidnetwork.medium.com/paid-network-attack-postmortem-ma…
Block Explorer https://etherscan.io/tx/0x4bb10927ea7afc2336033574b74ebd6f73ef35…

Sources & References

01
Source 1 https://rekt.news/paid-rekt/
02
Reference https://www.rekt.news/paid-rekt/

Threat Assessment

Severity Level

HIGH

Attack Vector Infinite Mint and Dump / Other
Root Cause Rugpull / Other
Year 2021

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