SocialFi Faces Escalating Trust Issues After UXLINK Hacker Releases 1 Billion Tokens, Leading to $11 Million in Losses

UXLINK, a decentralized Web3 social platform, recently reported a major security breach in which an attacker illicitly created 1 billion tokens. In an official announcement, the team verified the incident and advised the community not to trade the affected token on decentralized exchanges (DEXs) to prevent further financial losses. These unauthorized transactions, which can be tracked on Arbiscan, directly contravene the project’s whitepaper and prompted immediate intervention by key exchanges, most of which have frozen the compromised assets.

The perpetrator leveraged a vulnerability in UXLINK’s multi-signature wallet, utilizing a delegateCall to strip admin controls and seize authority over token management. This exploit enabled the attacker to mint new UXLINK tokens before distributing them across several wallets. In response, the UXLINK team has begun legal proceedings and compliance checks to restore the token’s supply in accordance with the whitepaper. Additionally, a token swap initiative is being developed to correct the imbalance, with full details to be released soon.

The market’s reaction was swift and negative. After the breach became public, the value of the UXLINK token plunged by 58%, dropping from $0.3 to $0.13, with its total market cap falling to $63.6 million. This sharp decline highlights investor fears and the crypto sector’s heightened sensitivity to security issues. Experts warn that such unauthorized minting may further damage trust, especially as UXLINK operates within the highly competitive SocialFi landscape.

In addressing the situation, UXLINK has partnered with exchanges to halt suspicious deposits and restrict the movement of the stolen tokens. The project is also working with law enforcement to trace the hacker’s actions and attempt recovery of the lost assets. Nonetheless, this episode highlights persistent risks in the DeFi ecosystem, where flaws in smart contracts can rapidly result in substantial financial losses.

The project’s internal governance has come under renewed examination, particularly as the attack coincided with community votes on token distribution schedules and strategies for diversification. A recent suggestion to transfer 4.5% of tokens to a secure multisig wallet for exchange support now appears uncertain given the breach. The UXLINK DAO Committee—responsible for treasury management and governance—will likely be instrumental in regaining user trust.

The future stability of UXLINK hinges on the successful implementation of its token swap plan and the restoration of openness. The project’s ongoing plans include scaling its Social Growth Layer and introducing AI-based features to boost user involvement. However, the fallout from the unauthorized token creation could stall these developments, particularly if regulatory or image-related hurdles persist.