PegNet’s 51% Attack — Why No User Funds Were Lost
The Curious Case of the White Hat Miner
In April of 2020 a miner / white hat developer decided to test the PegNet system in an a very public way but conducting a 51% attack on the oracles. In short the miner had enough hash power to submit some fake price data for a few blocks and massively increase the price of pJPY in order to convert a few pJPY into a millions worth of pUSD.
Ultimately the protections in PegNet prevented him from converting into PEG and dumping on the market and so instead he burned the pAssets he had generated. Shortly after the white hat proceeded to submit an interesting proposal for how to strengthen the oracles of PegNet. Which has now been written up as PIP 14:
I made a video about the attack. Importantly the way PegNet is designed without a central reserve or share pools of collateral no users lost any funds from the attack. That’s the beauty of the PegNet design.