New Solana Vulnerability Burns Tokens In Your Wallet – Can You Avoid It?

• Scammers are exploiting a feature called Permanent Delegate' in Solana tokens.
• This delegate can burn tokens immediately after they're swapped into a wallet, making them disappear.
• Tools like Jupiter Exchange and RugCheck identify tokens with this risky extension.

You purchase tokens, you swap them, you watch them arrive in your wallet - and then they vanish. Sounds like a simple transaction failure, right? Perhaps, but crypto users are worried about an insidious new crypto scam with Solana tokens.

Let's discuss the mysterious Permanent Delegate feature and how scammers are using it to manipulate basic tokenomics to their advantage.

Scammers Use Permanent Delegate Feature to Burn Tokens...

Within the Solana ecosystem, scammers can exploit the Permanent Delegate' feature to burn tokens immediately after users receive them.

According to Slorg, a member of Jupiter's Core Working Group, victims are left confused whentokens disappear within seconds after a swap, as scammers use this feature to burn tokens without permission.

Scammers have found a way to burn tokens inside your Solana wallet

But with a little awareness you can avoid becoming their next victim.

(1/8) pic.twitter.com/wZoNhWAIp0

- Slorg (@SlorgoftheSlugs) September 3, 2024

The Permanent Delegate' extension (part of Solana's Token 2022 standard) originally had legitimate goals, such as reclaiming tokens sent by mistake, enabling refunds, or ensuring compliance with sanctions.

Scammers had something else in mind, though. They found a way to turn the legitimate tool into a weapon of market manipulation.

The Permanent Delegate feature applies to all tokens in a particular mint. A new, freshly minted Solana project could easily have the feature on every token.

The person who owns the original mint can literally reach into the token holder's wallets and burn the tokens remotely.

In one case, a user swapped for a token called RED,' and seven seconds after the transaction was confirmed, all tokens were burned.

Permanent Delegate's unrestricted authority even allows scammers to destroy tokens in the transaction without the user's consent.

...But Why?

Some scammers may burn tokens purely for chaos and disruption, trolling victims and leaving them bewildered and frustrated.

However, burning tokens could also be a far more sophisticated market strategy. By reducing the number of tokens in circulation, scammers can potentially influence prices in decentralized finance (DeFi) protocols or prevent users from selling tokens.

This creates the illusion of stability, manipulating the token's floating supply and artificially inflating its value.

Scammers can profit by influencing the token's price or creating scarcity, and it's especially powerful for tokens with small market caps - such as new Solana projects.

Conclusion - Neutralizing Permanent Delegate. Can It Help?

Detection is the best prevention for this particular scam. Platforms like Jupiter Exchange and RugCheck have developed indicators that warn users when the Permanent Delegate extension is active in a token.

Users are advised to exercise caution, thoroughly check token details, and avoid rushing transactions. Failure to do so could result in your new tokens vanishing in a puff of smoke.

References

• X Post About the Solana Vulnerability (X)

The post New Solana Vulnerability Burns Tokens In Your Wallet - Can You Avoid It? appeared first on The Tech Report.