uHGT Security Incident Clarification & Token Migration Solution

A security incident took place on December 18th, 2022. Our team detected the risk immediately and deployed a fix to resolve the incident right after.

• All user assets of BUSD and HOOK tokens are safe and unaffected.
• In-app experience and uHGT earnings are functional.
• A fixed exchange rate is set to 0.000002 BUSD per uHGT token during the migration period.

To provide clarity to our community, here is a detailed breakdown of what happened:

A server storing information of several online hot wallets related to uHGT was compromised by a backdoor software. These hot wallets are only used to mint uHGT token & support gas costs for in-app Hooked Pickaxe NFT interactions.

The access of these addresses was used to send remaining 243.51BNB balances to an address at 10:30 UTC, Dec. 18th, 2022. (https://www.bscscan.com/address/0xd71fe64643c680a4a29559204f8a9a7bb1204b6f)

Later around 12:00 UTC, a number of uHGT tokens were minted, and 65.9k BUSD from the Pancake Swap pool (uHGT-BUSD) were transferred to the same address above.

Total losses caused are 125.5k BUSD equivalent and none of our users’ assets are affected.

Please be assured that:

• All users’ BUSD assets are safely stored in offline generated wallets, and these assets are not affected.
• All the operation system & infrastructure related to HOOK token is not affected at all.
• Wild Cash application service is operating normally and the user product experience remains functional.

We reviewed our internal infrastructure setup thoroughly, and made a system upgrade to prevent further damage.

Below are our concrete plans and schedules of uHGT migration:

1) A new token contract (uHGT_v2) will be deployed to replace the original uHGT token contract.

2) The new token uHGT_v2 balance will be 1:1 mapped to the original uHGT balance based on on-chain snapshots right before the security incident. You will still be able to swap uHGT to BUSD in-app during the transition period shortly, but the balance will be updated correspondingly (Please refer to details below).

Please be assured that the assets you’ve earned through in-app behaviors always belong to you.

On-chain transactions might be shortly paused for a few days during the re-deployment process and will be resumed immediately after completion.

3) For uHGT tokens purchased after the security incident, BUSD refund will be initiated directly back to the original purchase address within today. There are in total 30 affected transactions to be refunded.

4) Updates around uHGT to BUSD swap

In-app token earnings are functional as usual; uHGT to BUSD swap & BUSD withdrawal will be launched by Dec. 31st.

During the migration period, users will be able to swap uHGT to BUSD in Wild Cash with a fixed exchange rate based on the average price in the past 24hrs before the security incident, which equals to 0.000002 BUSD per uHGT.

Once swapped, the amount of uHGT tokens in your wallet will be automatically deducted, so the mapped uHGT_v2 balance will also be updated accordingly.

The swapped BUSD token will be sent to & safely stored in your in-app cold wallet right after the swap.

The mechanism of the fixed rate conversion is temporary during the transition period and will resume the original AMM style pricing model moving forward.

We will also soon share more updates and concrete plans of products to be released in January, 2023. Several key product innovations to be expected include Livestream Quiz-to-Earn, NFT emulation educational experience with DID infrastructure built in, personalized video learning platform.

Our team takes safety matters seriously, and we always put user assets in the first place. Please be assured that our team is committed to bringing in more fun & engaging Web3 products in the Hooked Protocol ecosystem.

We sincerely hope the community stands together with us and continues to focus on building the on-ramp layer for Web3.