Cardano (ADA)

JUST IN: Charles Hoskinson says "let me be clear, there is no problem with the Cardano protocol, core nodes, core cryptography, or any open-source wallets. This is a specific app problem. There's no cryptographic issue, no contagion spreading—this is not a protocol level issue."

🚨SecondFi: more than $20M stolen, or taken hostage - When the nonce is predictable, the key is public.

Last Tuesday, SecondFi wallets were drained at scale. Users were doing nothing exotic, just signing transactions like any other day. Then the funds were gone.

▶️What happened. Two waves. First, external attackers drained wallets: ~16M ADA plus NFTs, around $2.5M. Then a much larger move: ~129M ADA, around $20M, swept by SecondFi itself to a third party custodian, "to keep it safe."
Users were robbed by attackers, and users were swept by the platform!!

▶️The bug. Every signature scheme in this family uses a per signature secret number, the nonce. The one rule: it must be secret and unpredictable. EdDSA (Ed25519, what Cardano uses) makes it deterministic on purpose, derived from the private key and the message together. Deterministic, but secret. The secret input is the whole point. SecondFi's implementation derived it from public data alone. The nonce stopped being secret. Public in, public out.

▶️Why it