April 18, 2021

Over $ 500,000 withdrawn from the pools of the Balancer DeFi protocol in …

Over $ 500,000 Withdrawn from Balancer DeFi Protocol Pools as a result of an attack on a smart contract

Balancer’s DeFi protocol was attacked and lost at least $ 500,000 in pools.

“Apparently, someone emptied Balancer’s pool of WETH and STA by embezzling $ 500,000 in WETH,” said one of the first analysts Stephen Zheng..

The information about the attack was also confirmed by representatives of the 1inch exchange and co-founder of Balancer Labs Mike McDonald. According to 1inch, an attacker manipulated the Balancer smart contract, which led to a shortage of funds in the pools.

Over $ 500,000 withdrawn from Balancer DeFi protocol pools as a result of an attack on the DeFi protocol smart contract ...

“The funds were used by him to exchange WETH for STA and back 24 times. As a result, the STA pool was emptied. With each exchange of WETH for STA, the Balancer pool received 1% less STA than expected, ”the exchange explains..

Over $ 500,000 withdrawn from Balancer DeFi protocol pools as a result of an attack on the DeFi protocol smart contract ...

Using the described scheme, the hacker could freely withdraw the WETH, WBTC, SNX and LINK tokens from the Balancer smart contract. The attack became possible due to the deflation mechanism built into the STA, which destroys 1% of the amount transferred with each transaction.

1inch believe that the attacker is “a very advanced smart contract developer with deep knowledge and understanding of the leading DeFi protocols.” It was not possible to establish his identity, as he used the Tornado Cash Ethereum mixer to hide traces..

Over $ 500,000 withdrawn from Balancer DeFi protocol pools as a result of an attack on the DeFi protocol smart contract ...

According to Larry Sukernik, an investor at Digital Currency Group, DeFi products in their current form are too complex and can do more harm to users than good. “A high level of intelligence can be a barrier to creating a successful product. The products these people develop are often outstanding, but unsuitable for the mass consumer, ”he said..

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