Onyx Protocol Suffers $2.1M Loss in Hack, Highlights Need for Enhanced Crypto Security
Summary:
The decentralized peer-to-peer lending protocol, Onyx Protocol, was exploited, leading to a loss of around $2.1 million. The bug exploited by hackers is a known rounding issue in the widely-used CompoundV2 fork. Earlier in the year, the same bug was misused for stealing $7 million from the multichain lending protocol Hundred Finance. Given the consistent hacking, enhanced understanding of tracking cryptocurrency transactions is becoming increasingly essential.
The Onyx Protocol, a decentralized, peer-to-peer lending platform experienced a significant loss of approximately $2.1 million due to an exploit in a market with no liquidity, put into action on October 27. A bug in the system which is a well-known rounding error in the widely-used CompoundV2 fork, was misused by the hacker, as reported by blockchain researcher PeckShield who were among the first ones to flag this unnoticed breach.
According to the findings of PeckShield's independent inquiry, the oPEPE market, which allegedly lacked liquidity, was exploited by donation to borrow assets from other liquid markets. Subsequently, the exploited funds were redeemed by taking advantage of the recognized rounding issue.
Hundred Finance, a multichain lending platform, also suffered a similar fate when the same bug was exploited by an attacker to draw $7 million on April 16. Frequently used ERC-20 tokens and hTOKENS were used by the thief to manipulate the exchange rate, resulting in a greater withdrawal of tokens than what was initially put in, Certik identified.
Related: Crypto burglar takes $4.4M in a single day as losses snowball from LastPass breach.
The increasing hack attempts from malicious players necessitate a deeper knowledge regarding the tracking of cryptocurrency transactions. A freshly released article from Cointelegraph Research elucidated upon the various techniques suitable for enhancing crypto security through blockchain analysis. Reportedly, the process to track purloined cryptocurrencies involves six predominant stages: tracing transactions, clustering addresses, analyzing behavior, identifying patterns, maintaining regulatory vigilance, and fostering collaborations.
Magazine: Covering the astounding journey from rags-to-riches of Sandeep Nailwal of Polygon.
Published At
11/1/2023 12:22:03 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.