Garuda DEX Hacked: Trillions of Layer 2 Tokens Stolen in Major Security Breach
Garuda DEX, an on chain decentralized exchange operating on the Luna Classic ecosystem, has suffered a major security breach after its administrator wallet was compromised. The incident resulted in 12 staking contracts being hacked and enormous quantities of Layer 2 tokens being stolen, triggering significant selling pressure across affected tokens.
The security incident has raised concerns throughout the Luna Classic ecosystem, particularly among Layer 2 token holders, as the stolen assets have reportedly been sold by the attacker, contributing to liquidity losses and sharp price declines across several affected markets.
Garuda DEX Administrator Wallet Compromised
According to the incident report, the Garuda administrator validator wallet was compromised, giving the attacker access to multiple staking contracts.
The compromised wallet address was identified as:
terra18kdk2kf8uvzs5gghky23hv4q7wdnk0ff2k83wt
Following the compromise, the attacker managed to exploit 12 staking contracts and transfer the stolen assets to another wallet:
terra1ktlxt99d08x99wlds9p2j59uh6jy0nww7uq55l
The breach allowed the attacker to gain control of significant token balances held within the affected staking contracts, resulting in substantial losses across multiple Layer 2 projects.
47 Staking Contracts Successfully Secured
Despite the scale of the incident, Garuda reported that it managed to protect 47 additional staking contracts before they were compromised.
The team secured these contracts by transferring their administrator ownership to a multi signature wallet. This action helped prevent the attacker from gaining control of the remaining protected contracts.
Although the protection of these 47 contracts limited the potential damage, the 12 compromised contracts had already resulted in significant token losses.
Trillions of Layer 2 Tokens Affected
The incident affected multiple Layer 2 tokens operating within the Luna Classic ecosystem. According to the reported figures, the compromised staking contracts contained the following assets:
- BUTCHER: 1.98 trillion tokens
- BOYS: 23.44 billion tokens
- FIRE: 14.15 billion tokens
- SantaKlaus: 149.66 million tokens
- PoG: 103.45 million tokens
- LIFE: 78.42 million tokens
- SMF: 9.99 million tokens
- sFROG: 6.53 million tokens
- FIPS: 3.97 million tokens
- REX: 286,360 tokens
- DO: 42 trillion tokens
Among the listed assets, DO accounted for the largest reported token quantity, with 42 trillion tokens, followed by BUTCHER with 1.98 trillion tokens.
These figures highlight the scale of the breach and the potential impact on the affected token markets.
Stolen Tokens Trigger Selling Pressure and Liquidity Losses
Following the security breach, the attacker reportedly began selling the stolen tokens through available trading markets.
The sudden supply of stolen tokens entering the market created significant selling pressure, contributing to price declines across several affected Layer 2 assets.
The situation also raised concerns about market liquidity. When large quantities of tokens are sold within relatively thin liquidity pools, prices can experience substantial movements. As a result, even smaller transactions may face increased price impact and slippage.
For affected token holders, the incident represents more than a security breach involving staking contracts. The resulting market activity has also damaged trading conditions and created uncertainty across the wider Layer 2 ecosystem.
A Major Security Warning for the Luna Classic Ecosystem
The Garuda DEX incident highlights the risks associated with administrator wallet security and staking contract ownership within decentralized finance platforms.
Even when blockchain transactions remain transparent and publicly verifiable, compromised administrator credentials can create serious risks for contracts that depend on privileged administrative access.
The transfer of ownership for 47 staking contracts to a multi signature wallet demonstrates the importance of stronger administrative security measures. However, the 12 compromised contracts show how quickly an incident can escalate when critical wallet access falls into the wrong hands.
The incident is likely to remain an important development for Luna Classic Layer 2 projects, particularly as affected communities assess their losses, token liquidity conditions, and the security of their remaining contracts.
For now, the stolen token quantities, reported wallet compromise, and resulting market disruption make the Garuda DEX breach one of the significant security incidents affecting the Luna Classic Layer 2 ecosystem.
