Bitcoin Set For Short Squeeze Before Long Trap In October

The Shibarium network, a layer-two scaling solution on the Ethereum chain and focused on the Shiba Inu project, has suffered a major blow. Earlier on Monday, the Shiba Inu team announced that it is no longer endorsing the Shibarium network.

Why Is Shibarium no Longer Supported By Shiba Inu?

According to the announcement, the Shiba Inu ecosystem is best represented by Ryoshi’s vision of decentralization, true utility, and fairness for all holders. The recent Shibarium network attack, in which the team responded with 4.6 million tokens freezing, has raised eyebrows on the decentralization of the Shibarium ecosystem.

“As we said before: we respect those using Shibarium, but we no longer endorse it because it doesn’t align fully with Ryoshi’s vision — which values decentralization, true utility, and fairness for all holders,” the announcement noted. 

Although the token freeze helped the users not to lose their funds, the Shiba Inu team stated that decentralization is a major part of the SHIB ecosystem. 

What’s the Market Picture?

The notable blow to the Shibarium project will have a notable impact on its bid to expand to global markets. According to market data from DeFiLlama, the Shibarium network has seen its total value locked (TVL) drop to $1.81 million year-to-date. 

The mainstream adoption of Memecoins has also diluted the Shiba Inu buyers in the past year. With the Shiba Inu team distancing themselves from the Shibarium project, its mainstream adoption is likely to stall even during the highly anticipated altseason.

Meanwhile, SHIB price has continued to consolidate in a symmetrical triangle, possibly preparing for a major bullish breakout. 

MetaMask, a well-established digital asset wallet focused on the Ethereum ecosystem, has announced the launch of its stablecoin. The MetaMask USD (mUSD) is a stablecoin backed by the U.S. dollar, initially issued on the Ethereum network and an EVM layer two (L2) scaling solution Linea L.

How Will MetaMask USD Function?

The MetaMask USD will be compatible with MetaMask’s services and spendable with the MetaMask Card. The MetaMask team unveiled the mUSD stablecoin to enhance liquidity within its ecosystem, in addition to Linea-based incentives.

According to the announcement, the mUSD will offer users low-cost fiat on-ramps in MetaMask. The MetaMask team worked closely with the M0 Protocol and Bridge.xyz to facilitate the development of the mUSD.

Market Picture

According to market data from MetaMask’s site, the mUSD had a market cap of about $20.3 million and a total traded volume of around $32.35 million at the time of this writing. 

The mUSD is well-positioned to grow exponentially in the coming months fueled by the vast user base at MetaMask and the favorable regulatory framework. MetaMask launched its stablecoin after the U.S. government enacted the GENIUS Act to regulate the stablecoin market.

Additionally, the MetaMask platform has significantly benefited from the charges dropped by the Securities and Exchange Commission (SEC).

How Will Users Benefit?

According to market data analysis from CoinGlass, the altcoin season index has surged above 70, signaling a parabolic rally for altcoins ahead. As such, the strategic launch of mUSD will enhance the crypto trading liquidity on MetaMask. 

The Shiba Inu community is on high alert after a major compromise of the Shibarium bridge over the weekend. What began as reports from blockchain security firm PeckShield quickly escalated into a confirmed attack involving validator key leaks, flash loans, and malicious state changes. Developers have scrambled to contain the breach by freezing 4.6 million BONE tokens, but the situation has revealed vulnerabilities in the security of Shiba Inu’s infrastructure and has had an impact on Shiba Inu’s short-term price action.

Developer Confirms Attack Details

Taking to the social media platform X, Shiba Inu developer Kaal Dhairya revealed that the incident was probably planned for months and executed using a flash loan to acquire 4.6 million BONE tokens. After gaining access to validator signing keys, the attacker was able to gain majority control and approve a malicious state to siphon assets from the Shibarium bridge. Fortunately, the stolen BONE was delegated to Validator 1, leaving it locked by unstaking delays and giving the team a narrow opportunity to intervene.

Dhairya confirmed that the developers immediately froze the compromised funds, suspended all staking and unstaking activity, and transferred stake manager reserves into a hardware wallet secured by a 6/9 multisignature setup. However, the moves were temporary until the extent of the validator compromise could be confirmed, but the developer assured the community that protecting assets was the team’s top priority.

The breach drew quick attention from multiple blockchain security outfits. PeckShield, a leading blockchain security company, posted an Etherscan transaction showing the breach by the ShibaSwap exploiter on X. 

However, Kaal Dhairya noted that the Shiba Inu team is working with PeckShield, Hexens, and Seal 911 to continue investigations on the incident and the next steps to take.

According to a separate analysis by Tikkala Security on X, the losses appear to extend beyond the BONE freeze. The post claimed that multiple signer keys appear to have leaked in Shibaswap, which caused an estimated $2.8 million loss. Tikkala Security pointed to an attacker address on Etherscan and explained that the exploit involved repeatedly submitting legitimate Merkle leaf exit requests tied to a root signed by ten different addresses.

Market Impact And Price Outlook

Despite the severity of the breach, BONE’s market price spiked by over 20% in the hours following the freeze announcement, and this is likely due to the rapid containment. However, the BONE price has calmed, and the breach could have long-term effects that extend beyond the next few days. 

The Shibarium bridge is important to Shiba Inu’s strategy. Any lingering doubts about validator integrity or the scope of the losses could weigh heavily on the price of Shiba Inu and BONE.

As it stands, both the Shiba Inu and BONE prices have reversed gains in the past few hours. At the time of writing, BONE is trading at $0.1959, down by 4.4% in the past 24 hours, but still up by 24% from its price point seven days ago. Shiba Inu, on the other hand, is trading at $0.00001305, down by 7% in the past 24 hours.

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