Memecoins
Normie negotiates with a hacker to recover the stolen funds
The team behind Base memecoin Normie (NORMIE) is currently negotiating with a hacker to recover 90% of the funds stolen due to a smart contract vulnerability, which led to a $41.7 million plunge in the market capitalization of the token in three hours.
Blockchain analytics firm Lookonchain was among the first to identify the exploit and the hacker’s subsequent offering via an on-chain message to the Normie distributor’s address on May 26.
The hacker’s offer and conditions
Following the exploit, Normie accepted the hacker’s offer to return 90% of the stolen tokens, even though the price of the token had already dropped by 96%. The deal hinges on Normie using the stolen funds, along with $2.3 million from the team’s development wallet, to launch a new token to refund NORMIE holders. Furthermore, the hacker did not request retaliation in a subsequent on-chain message.
The Normie team confirmed the need for a relaunch, stating that this would happen after recovering their main Twitter account and securing funds from the exploiter. However, their temporary Twitter account was also suspended shortly after these statements.
The hacker insisted on strict conditions, stressing that the relaunch must occur before the funds are returned. They noted that the development portfolio had gained significantly during the exploit and they had no other means to ensure the proper use of those funds.
In the wake of the hacker’s offer, X was inundated with fake posts from Normie falsely announcing the relaunch of the new token, aiming to trick people into clicking on fraudulent links. “Dinho,” an administrator of the official NORMIE Telegram group, could not confirm when token holders might recover the stolen funds and his X account was also suspended.
Message from exploiter Normie. Source: Lookonchain
The broader impact on Memecoin holders and the market
According to CoinGecko, NORMIE price began falling at 3:55 UTC on May 26, plummeting more than 92% to $0.0032 in one hour. It fell 99.5% in two and a half hours, and despite a brief price spike at $0.019, continued to fall to $0.0016 at the time of writing, marking a 96% decline. The market capitalization bottomed at $200,000 after falling from $41.9 million, but has since seen a slight recovery.
According to the team behind blockchain scam detection tool Quick Intel, 72,000 NORMIE holders have been affected by the smart contract vulnerability, which was initially discovered in March. One trader, in particular, lost over $1 million worth of digital assets due to the exploit. The trader had spent $1.16 million to purchase 11.23 million Normie memecoins, but saw his investment plummet by more than 99% to just $150, as reported by Lookonchain on May 26.
Normie was launched during a memecoin craze on Base in March 2024, reaching a peak market capitalization of $130 million on April 2, according to CoinGecko. A recent investigation revealed that 91% of Base memecoins possess vulnerabilities that could expose users to significant losses.
Resilience in the Memecoin market
Despite the unfortunate incident with Normie, the memecoin market remains active, with traders continuing to invest in animal-themed cryptocurrencies. The frog-themed memecoin Pepe, for example, hit a new all-time high of $0.00001718 on May 27, rising more than 75% over the past week.
Although memecoins lack inherent utility and are among the most volatile digital assets, some traders have managed to make significant profits. Two weeks ago, a Pepe trader turned $3,000 into $46 million trading the memecoin, earning a return of more than 15,718 times his initial investment, buoyed by the resurgence of the GameStop saga.
Despite the risks inherent in the memecoin market, it continues to attract traders attracted by the potential for high returns. This constant interest highlights the volatile and speculative nature of memecoins, where significant gains and losses can occur quickly.