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 <h2 data-ct-widget="explained-block-title" id="infinite-mint-attack-explained">Infinite mint attack, explained</h2>
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 <p><em>An infinite mint attack occurs when an attacker manipulates a contract’s code to continuously mint new tokens beyond the authorized supply limit.&nbsp;</em></p>
 <p>This kind of hack is most common in<a href="https://cointelegraph.com/learn/defi-a-comprehensive-guide-to-decentralized-finance" rel="noopener noreferrer nofollow"> decentralized finance (DeFi)</a> protocols. The attack compromises the integrity and value of a <a href="https://cointelegraph.com/learn/what-is-a-cryptocurrency-a-beginners-guide-to-digital-money" rel="noopener noreferrer nofollow">cryptocurrency</a> or token by creating an infinite quantity of them.</p>
 <p>For instance, a hacker exploited the Paid network’s smart contract vulnerability to mint and burn tokens, resulting in a $180-million loss and an 85% drop in PAID’s value. Over 2.5 million PAID tokens were converted to Ether (<a href="https://cointelegraph.com/ethereum-price" rel="noopener noreferrer nofollow">ETH</a>) before the attack was stopped. The network reimbursed users, dispelling rumors of an inside job (<a href="https://cointelegraph.com/explained/crypto-rug-pulls-what-is-a-rug-pull-in-crypto-and-6-ways-to-spot-it" rel="noopener noreferrer nofollow">rug pull</a>).</p>
 <p>The malicious actor might profit from such attacks by selling the tokens created illegally or by interfering with the impacted blockchain network’s regular operations. The prevalence of infinite mint attacks emphasizes how crucial it is to perform thorough code audits and incorporate security measures into<a href="https://cointelegraph.com/learn/what-are-smart-contracts-a-beginners-guide-to-automated-agreements" rel="noopener noreferrer nofollow"> smart contract</a> development to protect against exploits of this kind.</p>
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 <h2 data-ct-widget="explained-block-title" id="how-does-an-infinite-mint-attack-work">How does an infinite mint attack work?</h2>
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 <p><em>To create a loophole that allows the attacker to mint an infinite number of tokens, an infinite mint attack targets vulnerabilities in smart contracts, specifically those related to token minting functionalities.&nbsp;</em></p>
 <h3 id="step-1-vulnerability-identification">Step 1: Vulnerability identification</h3>
 <p>The attack’s methodology entails locating logical weaknesses in the contract, usually related to input validation or access control mechanisms. Once the vulnerability is found, the attacker creates a transaction that takes advantage of it, causing the contract to mint new tokens without the necessary authorization or verification. This vulnerability might allow for bypassing the intended limitations on the number of tokens that can be created.</p>
 <h3 id="step-2-exploitation">Step 2: Exploitation</h3>
 <p>The vulnerability is triggered by a malicious transaction that the attacker constructs. This could entail changing parameters, executing particular functions, or taking advantage of unforeseen connections between various code segments.</p>
 <h3 id="step-3-unlimited-mining-and-token-dumping">Step 3: Unlimited mining and token dumping</h3>
 <p>The exploit allows the attacker to issue tokens in excess of what the protocol’s architecture intended. This token flood may cause inflation, which would lower the value of the coin linked to the tokens and could result in losses for various stakeholders, including investors and users.</p>
 <p>Token<a href="https://cointelegraph.com/explained/what-is-anti-dumping-policy-in-crypto" rel="noopener noreferrer nofollow"> dumping</a> is the practice of an attacker swiftly flooding the market with freshly created tokens and then exchanging them for<a href="https://cointelegraph.com/learn/stablecoins-101-what-are-crypto-stablecoins-and-how-do-they-work" rel="noopener noreferrer nofollow"> stablecoins</a> or other cryptocurrencies. The original token’s value is sharply diminished by this unexpected increase in supply, causing a price collapse. However, selling the inflated tokens before the market has a chance to benefit the attacker.</p>
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 <h2 data-ct-widget="explained-block-title" id="consequences-of-an-infinite-mint-attack">Consequences of an infinite mint attack</h2>
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 <p><em>An infinite mint attack leads to the rapid devaluation of a token’s value, financial losses and ecosystem disruption.</em></p>
 <p>An infinite mint attack creates an endless quantity of tokens or cryptocurrency, instantly devaluing the affected asset and resulting in large losses for users and investors. This compromises the integrity of the entire ecosystem by undermining confidence in the impacted blockchain network and the decentralized apps that are connected to it.</p>
 <p>Furthermore, by selling the inflated tokens before the market fully reacts, the attacker can benefit and possibly leave others holding worthless assets. As a result, investors may find it difficult or impossible to sell their assets at a fair price if the attack causes a liquidity crisis.</p>
 <p>For instance, during the <a href="https://cointelegraph.com/news/cover-protocol-suffers-infinite-minting-attack-price-tanks-97" rel="noopener noreferrer nofollow">December 2020 Cover Protocol attack</a>, the token’s value fell from over $700 to less than $5 in a matter of hours, and investors who held COVER tokens suffered financial losses. The hackers minted over 40 quintillion coins.</p>
 <p><img alt="Cover attacker minted 40 quintillion tokens" src="https://s3.cointelegraph.com/storage/uploads/view/e0c11efa47b1ae2550c6ff0779822af1.png" title="Cover attacker minted 40 quintillion tokens"></p>
 <p>The collapse of the token’s value can disrupt the entire ecosystem, including<a href="https://cointelegraph.com/learn/what-are-dapps-everything-there-is-to-know-about-decentralized-applications" rel="noopener noreferrer nofollow"> decentralized applications (DApps)</a>, exchanges and other services that rely on the token’s stability. The attack may result in legal issues and regulatory scrutiny of the project, which could result in fines or other penalties.</p>
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 <h2 data-ct-widget="explained-block-title" id="infinite-mint-attack-vs-reentrancy-attack">Infinite mint attack vs. reentrancy attack</h2>
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 <p><em>An infinite mint attack aims to create a limitless number of tokens, whereas a reentrancy attack employs withdrawal mechanisms to continually drain funds.&nbsp;</em></p>
 <p>Infinite mint attacks take advantage of flaws in the token creation process to generate an unlimited supply, driving down the value and costing investors losses.&nbsp;</p>
 <p><a href="https://cointelegraph.com/explained/reentrancy-attacks-in-smart-contracts-explained" rel="noopener noreferrer nofollow">Reentrancy attacks</a>, on the other hand, concentrate on the withdrawal procedure, giving attackers the ability to continuously drain money from a contract before it has a chance to update its balances.&nbsp;</p>
 <p>Although any attack can have disastrous outcomes, it is essential to understand the differences to develop effective mitigation techniques.</p>
 <p>The key differences between an infinite mint attack and a reentrancy attack are:</p>
 <p><img alt="Infinite mint attack vs. reentrancy attack" src="https://s3.cointelegraph.com/storage/uploads/view/3839872cecfbd72b199f03866502d7b4.jpg" title="Infinite mint attack vs. reentrancy attack"></p>
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 <h2 data-ct-widget="explained-block-title" id="how-to-prevent-an-infinite-mint-attack-in-crypto">How to prevent an infinite mint attack in crypto</h2>
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 <p><em>Cryptocurrency projects can greatly lower the chance of becoming the target of an endless mint attack and safeguard community members’ investments by emphasizing security and adopting preventative measures.</em></p>
 <p>It needs a multifaceted strategy that puts security first at every stage of a cryptocurrency project to prevent infinite mint attacks. It is crucial to have thorough and frequent <a href="https://cointelegraph.com/learn/what-is-a-smart-contract-security-audit-a-beginners-guide" rel="noopener noreferrer nofollow">smart contract audits </a>performed by independent security experts. These audits carefully check the code for flaws that could be used to mint infinite amounts of money.&nbsp;</p>
 <p>Strong access controls must be in place; minting powers should only be granted to authorized parties; and<a href="https://cointelegraph.com/learn/what-is-multisignature-wallet" rel="noopener noreferrer nofollow"> multisignature wallets</a> should be used for increased security. Real-time monitoring tools are necessary to quickly respond to possible attacks and identify any odd transaction patterns or abrupt surges in the supply of tokens.</p>
 <p>Projects should also have strong backup plans ready to handle any possible attacks quickly and minimize damage. This entails having open lines of communication with exchanges, wallet providers and the community at large to anticipate possible problems and plan solutions.</p>
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What is an infinite mint attack, and how does it work?

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