After the recent Binance hack, we investigated whether NMR or any Numerai wallets / contracts are vulnerable to the the same attack vector used to steal from Binance.
Our treasury, hot wallet, and user funds are currently safe.
You can add additional safeguards around Privy.
How did Binance get hacked?
A Binance engineer’s machine was compromised and attackers used it to leverage EIP-7702 delegated smart wallet functionality. The attackers used a valid authorization to approve a malicious sweeper contract that drained hot wallet funds. This is the risk of centralized services and is one of the main reasons we are migrating everyone to Atomic Blockchain Staking.
Is the treasury safe? Yes.
The treasury is secured by a multisig key quorum and is not exposed to EIP-7702. The hot wallet keeps minimal funds in it’s possession at any time, is locked behind strict permissions boundaries, and is also not exposed to EIP-7702.
Is Atomic Blockchain Staking safe? Yes.
The contracts themselves are secure and only the wallet you use for staking can access your NMR in the contracts after the stakes resolve. Numerai can only post official payout/burn numbers, trigger settlements back into your allocation strategies, and emergency release stakes back into your allocation strategies. We cannot directly access the NMR locked in the staking contract.
Is Privy safe? Yes, but there’s more…
Privy wallets support EIP-7702 delegation and were generated with a single delegate signing key, which Numerai controls. We added this key as a temporary solution so that we could seed your Atomic Blockchain Staking contracts for you and make the migration seamless. After we initiate the Signals merge on Jan 1, 2027, Numerai no longer needs this key in place. In the meantime, there is still inherent counterparty risk for you. We pushed an update to the staking dashboard allowing you to mitigate this risk in one of 2 ways:
Reduce this risk by approving the signer policy for our key.
We generated a new signer policy in Privy restricts our key to only 2 operations on your behalf: generate allocation strategies and configure those strategies. Changes to this policy are controlled by a multisig key quorum requiring multiple engineers to approve changes. This adds additional protections from the attack vector that the Binance exploiters used.
We cannot add this policy ourselves, only the wallet owner (you) can approve a new policy. You are not required to attach this policy, it’s simply an extra layer of protection. If you have any staked Signals models, this is a good option for you so Numerai can provide a seamless staking experience during the merge.
Eliminate this risk by removing our signing key.
Alternatively, you can remove our signing key. Some users have already removed our signing key privileges via the Privy home webapp: https://home.privy.io
If you have staked Signals models, however, this can pose a problem for the planned Signals merge on Jan 1, 2027. Removing our key will block our ability to set up your allocation strategy to match your stake settings in Signals. If you remove our key, it will be your responsibility to configure your allocation strategy on December 31, 2026.
Not your keys, not your coins.
This classic crypto idiom rings truer after every attack.
You can see on [Etherscan](Numeraire (NMR) | ERC-20 | Address: 0x1776e1f2…d3cb46671 | Etherscan) that the exploiter stole 127,141 NMR (~$1.1m) from Binance and liquidated it on Uniswap V3 shortly after. NMR is a fully decentralized ERC20 token. Numerai can only control NMR sent to the first 1 million ETH wallet addresses (this is how the legacy Numerai wallet works), so there is / was no way for us to control the NMR stolen from Binance. The only person that can guarantee security is YOU.
If you do not control the keys to a wallet that has your NMR, you’re putting your trust in another party and, by extension, every person to which they give access. We chose Privy to help with the transition to Atomic Blockchain Staking because of their security infrastructure. But, even a company with as many resources as Binance can be compromised by the most common form of attacks: social engineering and/or malware. These attack vectors will never go away. You can only protect yourself by controlling your own keys and educating yourself about security best practices.
This is a good time to remind everyone of the primary reason we are migrating to Atomic Blockchain Staking: giving you control of your stake. We implement security best practices for our centralized auth system and every tournament engineer is hyperaware of security. However, the legacy Numerai wallets are still centralized and controlled by us. The purpose of crypto is to decentralize the risk model, making it harder for attackers to compromise a single point of failure.
Once all tournaments are operating on Atomic Blockchain Staking, we will be updating our signing key policy to block all actions and you can remove our keys from your wallets whenever you want. We will also be offering BYOW integrations, starting with Meta Mask, so you can control your own signing keys. We suggest that you become comfortable securing your own keys to your wallets and preparing for BYOW as the default.