- Recent developments in the Cosmos network have raised serious concerns about the integrity of its Liquid Staking Module (LSM).
- These issues have been exacerbated by allegations of North Korean involvement, which has caused a significant drop in the network’s token value.
- As security flaws become apparent, Cosmos developers are pushing for drastic changes, including the potential removal of the LSM.
Cosmos developers are taking significant steps to address serious security threats posed by the Liquid Staking Module, including ties to North Korean agents, as investor confidence wanes.
Developers Move to Remove Liquid Staking Module Amid Security Concerns
In a critical shift, developers associated with the Cosmos network are moving to eliminate the Liquid Staking Module (LSM) from the Cosmos Hub. This action follows alarming reports from blockchain development firm All in Bits (AiB) regarding substantial security vulnerabilities present within the LSM, compounded by connections between the module’s development and North Korean operatives. The urgency of this decision is underscored by a notable decline in the value of Cosmos’ ATOM token, which has dropped over 2.5% over the past day, making the ATOM token valued at $4.44 at the time of reporting.
North Korean Links Spark Security Alarm
According to findings released by AiB, a significant share of the LSM’s development was reportedly completed by actors linked to the North Korean government. This revelation has sent shockwaves through the Cosmos ecosystem, as the LSM is designed as an extension of existing Cosmos staking modules. The interdependent nature of its architecture raises the stakes, indicating that a security breach in the LSM may endanger the entire staking framework and all staked ATOM tokens. Moreover, AiB accused leading developers Iqlusion and Zaki Manian of a lack of transparency concerning these dangerous affiliations; they allegedly failed to inform the community about the potential risks associated with North Korean contributions.
Call for Transparency and Action
AiB’s exposé states that Zaki Manian was reportedly aware of North Korean ties as early as March 2023 and neglected to inform the wider Cosmos community. This inactivity raises serious questions about accountability and governance standards within the Cosmos project. Additionally, AiB warned that a notable design flaw in the LSM enables users to bypass slashing penalties, shifting financial risks to other stakeholders. Given that these concerns were noted during audits, the lack of remedial actions raises further alarms about the design’s robustness, which developers instead termed an “intentional design goal.”
Community Response and Future Protocols
In a recent communication on X, Jacob Gadikian, a Cosmos developer, indicated that a systematic process to retract the LSM from the Cosmos Hub is already underway. Capturing a sense of urgency, he noted that specific branches of the Cosmos SDK repository—identified by suffixes indicating LSM contributions—harbor code allegedly authored by individuals with North Korean affiliations engaged in illicit activities through deceptive identities. He stated unequivocally that if the code cannot be entirely purged from the ecosystem, an overt, conspicuous warning must be placed on the cosmos-sdk repository to alert developers and users alike.
Demand for an Extensive Audit of LSM
In light of the global repercussions and scrutiny surrounding the security of blockchain platforms, Cosmos developers are advocating for a comprehensive audit of the LSM. This audit aims to unravel the complete extent of North Korean involvement while also possibly leading to sanctions against implicated individuals, which includes well-known developers like Zaki Manian and others associated with the module’s promotion.
Conclusion
The unfolding situation surrounding the LSM serves as a critical reminder of the importance of transparency and due diligence in blockchain development. As Cosmos developers seek to fortify the security of their ecosystem, the incident highlights the need for enhanced vigilance among blockchain communities to prevent malicious infiltration that jeopardizes both investor confidence and the integrity of decentralized platforms.
