“We were not aware this specific type of attack was possible.”
Decentralized finance (DeFi) liquidity supplier Balancer Pool admitted early Monday morning that it had fallen sufferer to a complicated hack that exploited a loophole, tricking the protocol into releasing $500,000-worth of tokens.
In a weblog publish, Balancer CTO Mike McDonald stated the attacker had borrowed $23 million-worth of WETH tokens, an ether-backed token appropriate for DeFi buying and selling, in a flash loan from dYdX. They then traded, towards themselves, with Statera (STA), an funding token that makes use of a switch payment model, and burns 1% of its value each time it’s traded.
The attacker went between WETH and STA 24 occasions, draining the STA liquidity pool till the stability was subsequent to nothing. As a result of Balancer thought it had the identical quantity of STA, it launched WETH that equated to the unique stability, giving the attacker a bigger margin for each commerce they accomplished.
In addition to WETH, the attacker carried out the identical assault utilizing WBTC, LINK and SNX, all towards Statera tokens.
The hacker’s id stays a thriller, however analysts at 1inch exchange, a decentralized exchange aggregator, stated they’d lined their tracks nicely: the ether used to pay transaction charges and deploy sensible contracts was laundered by means of Twister Money, an Ethereum-based mixer service.
“The person behind this attack was very sophisticated smart contract engineer with extensive knowledge and understanding of the leading DeFi protocols,” 1inch stated in its weblog publish on the breach.
For its half, the staff behind Statera batted away accusations that the protocol had both failed or been designed deliberately for this type of assault to happen.
“We deeply regret, apologize and sincerely extend our condolences to all the victims of this attack,” Statera stated in an official announcement.
The undertaking added that it was not able to have the ability to refund the attacker’s victims.
Balancer Pool will now start blacklisting all switch payment tokens, together with Statera, McDonald stated. In addition to one other audit, McDonald stated the staff would do extra analysis into how the hack occurred and whether or not comparable vulnerabilities exist with different listed tokens.
At press time, CoinGecko information reveals BAL tokens buying and selling on the $11 mark, down about 5% up to now 24 hours.
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