On Friday, an unexpected network fork occurred on Cardano, caused by a malicious delegation transaction that exploited a weakness in the node software.
The incident briefly partitioned the blockchain, but block production proceeded unabated.
Validation mismatch triggers a chain split
Intersect, the governance organization of Cardano, stated that this was a result of a version validation mismatch between nodes. The newer node software accepted the invalid transaction, whereas the older ones rejected it, forming two competing chains. According to Intersect, the problem was created after a bug in a software library was not found during the validation process.
This divergence was promptly contained, and the developers confirmed that the network remained functional during the incident. Production and blocking never ceased; the protocol itself continued to run as usual despite transient discrepancies. Staking pool operators encouraged users not to spread false information about a network-wide outage.
Developer reaction and research
In his role as co-founder of Cardano, Charles Hoskinson referred to the event as a calculated move of an aggrieved stake pool operator. He said the wallet used to make the purchase was found within the same day, and law enforcement agencies such as the FBI were put on alert.
The wallet was of an Incentivized Testnet participant. Hoskinson stated that everyone was affected, temporarily, and some of the staking pool operators had lost block rewards because of a double-spend. Developers immediately used a hard fork to unify the chains in order to pull the network business back to normal.
Markus, Cliopools operator, has remarked that at first the branch with the malformed transaction had an increased growth rate with increased stake weight, which points out the temporary benefit of the malformed chain.
Stake pool operator acknowledges guilt
An anonymous user by the name Homer J. took ownership of the incident. The operator claimed that they entered the faulty transaction as a test run to monitor network behavior and did not have any intent to cause harm. Homer made a public apology and admitted the extent of disruption and that they had been following AI-generated instructions in blocking server traffic.
Hoskinson lauded the stability of the network and encouraged all stake pool operators to upgrade to node version 10.5.3. According to him, the two chains would merge completely very soon, hence restoring the network to normal functioning.
After the incident, ADA fell to its lowest price in the past 24 hours, which was more than 5.9%, where it was traded at $0.4013. Developers continue working on the cleanup of the remaining problems and the stability of the network, and the community is recommended to have the latest versions of nodes to minimize the possibility of such incidents.
