The Logic and Reflection Behind the GALA Event

The recent GALA incident originated from pNetwork's improper actions to recover $400,000 in liquidity, which ultimately triggered a trust crisis of at least $250 million for Huobi. The entire development process of the incident is complex and tortuous, warranting our in-depth analysis and reflection.

The cause of the incident was that pNetwork issued an additional 55.6 billion pGALA without adequate communication and injected it into the ecosystem. This practice not only lacked basic DeFi security knowledge but also acted hastily without fully assessing the potential risks, which was quite irresponsible. Subsequently, a large amount of GALA was deposited into a certain trading platform and sold off; some users took the opportunity to arbitrage, while others suffered losses due to bottom-fishing.

During the crisis management process, the performance of a certain trading platform was disappointing. They failed to suspend deposit and withdrawal services in a timely manner, did not respond to potential internal misconduct, and arbitrarily treated all users who bought the dip as attackers, freezing their assets. The platform's senior management was slow to pinpoint the key issues, ultimately leading to a reversal of public opinion. This series of actions not only exposed the platform's shortcomings in risk control and crisis public relations but also severely damaged user trust.

For users participating in arbitrage, this event has also sounded the alarm. Many have underestimated the risks of the cryptocurrency market, lacking understanding of basic industry knowledge, and blindly following trends has ultimately led to bitter consequences. In this unregulated field, users need to raise their risk awareness and enhance their self-protection capabilities.

It is worth noting that the usually active security audit companies were collectively absent in this incident. This highlights the limitations of current security audits - they can identify code vulnerabilities, but struggle to prevent crises caused by human factors. Although this incident was not caused by a smart contract vulnerability, it is more alarming than any code issue.

In the end, although a certain trading platform promised to bear the losses, the resulting trust crisis may have greater long-term effects. As industry participants, we should take this as a warning, reassess the various principles and practices within the cryptocurrency ecosystem, and strive to build a safer, more transparent, and responsible environment.