In a recent turn of events, the Blast-based web3 gaming platform Munchables faced a staggering loss of over $60 million due to an exploit. The incident, which occurred on Tuesday, has sent shockwaves through the crypto-gaming community. 

Unlocking the secrets to success in the world of decentralized finance (DeFi) can often feel like traversing a labyrinthine maze. Amidst the myriad of projects vying for attention, one platform recently emerged and stole the spotlight: Munchables.

Positioned as "a leading farm on Blast", Munchables captivated web3 enthusiasts with its delightful Pokémon-style gameplay and enticed investors with its rewards system. In this article, we delve into the intricacies of Munchables, exploring why it has garnered such fervent attention and the recent hack that cost the project over $60 million of funds to be lost.

Over $60 Million Lost

Munchables made a public statement on platform X, acknowledging the breach at 5:37 p.m. ET. Following the announcement, crypto enthusiast ZachXBT swiftly identified the exploiter's address, revealing that it held approximately 17,411 ETH, equivalent to $62.5 million. This exploit stands as one of the largest losses witnessed in 2024, raising concerns about the security of such platforms.

The platform reassured its users by stating, "We are tracking movements and attempting to stop the transactions. We will update as soon as we know more." However, the magnitude of the breach has left many questioning the efficacy of Munchables' security measures.

Prior to the exploit, Munchables boasted a Total Value Locked (TVL), exceeding $80 million, according to data from DeFiLlama as of 4:00 p.m. ET on March 26. However, within hours of the breach, this figure plummeted to approximately $34.08 million, indicating a significant loss of investor confidence.

What is Munchables?

At first glance, Munchables may resemble a Pokémon-style game centered around caring for adorable creatures. However, its meteoric rise in Total Value Locked (TVL), exceeding $80 million, begs the question: what sets it apart? Hidden beneath its charming exterior lies a "risk-to-reward (R/R) farm on Blast".

Risk-to-reward (R/R) Farming?

• Zero Market Risk: By locking ETH or its USD equivalent for at least 30 days, participants receive free Munchable NFTs. During the initial 30 days, native ETH staking yields are retained.
• Gamified Points Farming: Munchables uniquely rewards Blast points, Blast Gold, and Munch points based on both TVL and in-game performance. Excelling in gameplay secures a larger share of airdrop rewards.
• Daily Munch Points: Unclaimed Munch points are redistributed daily, incentivizing active gameplay and penalizing inactivity.

Munchables offers leveraged farming for Blast points, Blast Gold, and Munch points without associated risks like liquidation or impermanent loss. Playing skillfully yields more airdrops per ETH compared to traditional DeFi farms on Blast.

How Does the Game Work?

• Participants receive one Munchable NFT for every ETH locked for 30 days or more.
• Daily Schnibbles, based on locked ETH and duration, fuel Munchable growth.
• Choose one of five realms for your Munchables, each influencing growth rates.
• Different rarities and realms affect growth speeds and rewards.
• Daily Munch points must be claimed promptly to maximize rewards.
• Final rewards include Blast points, Blast Gold, and airdrops based on gameplay performance.

Final Thoughts

Blast, the Ethereum Layer 2 on which Munchables operates, was founded by Tieshun Roquerre, who also established the NFT marketplace Blur. The platform gained traction quickly, with early access users accumulating a staggering $2.3 billion in TVL even before its official launch on February 29th, 2024.

This exploit serves as a stark reminder of the vulnerabilities inherent in web3 gaming platforms, especially in the burgeoning crypto space. As investors and users await further updates from Munchables, the incident prompts a crucial conversation about security and risk management in decentralized gaming ecosystems.