Woofun AI reports that The Sandbox immediately suspended bridging operations on Base and BNB Smart Chain after detecting an exploit enabling the creation of unbacked SAND tokens via LayerZero. This rapid response was triggered by the discovery of unauthorized token minting, which threatened the integrity of cross-chain liquidity despite no direct theft of funds.

The deeper driver of the incident was a hijacking of LayerZero delegate permissions through an 'approveAndCall' function, as flagged by security firm Blockaid. Although the attacker executed over 400 transactions to mint tokens with a nominal face value of $49 billion, this figure vastly exceeded available liquidity. The actual impact was minimal, representing less than 0.01% of the 3 billion SAND supply, or fewer than 300,000 tokens against the $136 million market cap.

Per Woofun AI, forensic analysis by PeckShield identified 14.9 billion SAND minted across two specific addresses during the attack. These differing figures reflect separate stages of the incident and measure nominal token creation rather than confirmed financial losses. The discrepancy highlights the difference between theoretical value and realizable assets in decentralized finance exploits.

Structurally, the exploit left SAND on Base and BNB Smart Chain immobile, prompting warnings against trading due to compromised liquidity.

However, Ethereum and Polygon networks remained unaffected, with locked backing tokens intact. In response, South Korean exchanges Bithumb and Upbit suspended SAND deposits and withdrawals, while the token price saw a near 10% intraday plunge before stabilizing with only a 0.8% drop over 24 hours.

The Sandbox is preparing compensation for qualifying users by taking a snapshot from before the incident. A technical post-mortem will be published later to detail the remediation steps. This marks a significant test of cross-chain security protocols, though the limited financial damage suggests robust underlying asset protection.