Abracadabra Money Confirms $6.49M Exploit; Plans Remuneration Via Buy-back, Burn Process
Summary:
Abracadabra Money, a cross-chain lending platform, confirmed a $6.49 million exploit involving its Ethereum-based lending system, leading to a temporary devaluing of its Magic Internet Money (MIM) stablecoin. The platform's engineers are investigating the exploit, which was flagged by blockchain security firms PeckShield and CertiK, and plan to compensate victims via a buy-back and burn process.
Abracadabra Money, a lending platform operating across multiple blockchain networks, has confirmed a security breach resulting in a loss of $6.49 million. This was due to an issue with the protocol's Ethereum-based cauldrons, which facilitate borrowing of the Magic Internet Money (MIM) stablecoin against various collateral assets. The MIM developers recognized the flaw and assured that an investigation is underway. They further added that those impacted by the breach are to be reimbursed via a process of buying back and burning.
Blockchain security firm, PeckShield, spotted the $6.49 million compromise on Tuesday. The anonymous attacker reportedly initiated the exploit with a single Ether, funneled through the cryptocurrency mixer, Tornado Cash. Less than sixty minutes post the disclosure of the exploit, MIM, an algorithmic stablecoin attached to the U.S. dollar, experienced a dip down to $0.77, losing its dollar link. However, it bounced back to the current rate of $0.94, as per CoinMarketCap data.
CertiK, another blockchain security firm, suggested that the exploitative attack might have arisen due to a "rounding issue". They elaborated how the exploiter habitually invoked the "userBorrowPart()" function, and then "repay()" via the protocol's v4 cauldrons. This indicates that the attacker was continually borrowing and repaying loans, an action that led to the draining of funds from the contract.
Abracadabra's Magic Internet Money had previously deviated from its peg in 2022, as a fallout of Terra Luna ecosystem's collapse. Consequently, in August, the protocol increased the interest rate on the coin by 200%, aiming to manage risk related to the Curve protocol.
Published At
1/30/2024 7:45:39 PM
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