$500,000 worth Crypto Stolen from Balancer
We know that with advancements in technology, its not only people who follow the law that benefit. On Sunday afternoon, an admin on telegram reported that there was an issue with Balancer which is a DeFi protocol primarily focusing on swapping tokens. It was not long after that this news was confirmed via Twitter. The tweet read ““Apparently someone drained a Balancer Pool made up of WETH and STA and got away with $500k worth of WETH,” This was from the Blocks Steven Zheng and it was reiterated by 1inch (An Ethereum based Decentralized exchange) and Mike McDonald (Co-Founder of Balancer Labs). According to a breakdown of the attack, the initial report was correct, the hacker had gotten away with draining $500,000 in ETH and other cryptocurrencies. The cryptos in question were Wrapped ETH, Wrapped Bitcoin, Synthetix and Chainlink.
Details on how the hacker managed to pull this off were revealed later by 1inch. The report reads that the hacker conducted the actions in two separate transactions. Two multi token pools filled with deflationary tokens were affected and drained. The hacker in question first got a flash loan worth $23 million of ETH from dYdX, converted that into WETH and then started exchanging it for STA (Statera). This action was repeated 24 times which caused the STA balance to be drained to 0.000000000000000001 STA as 1% transaction fee was subtracted on each trade. With the STA assets getting less and less in the pool, it allowed the hacker to swap it with other cryptos in the pool for a very cheap cost. According to 1inch, the attacker was “very sophisticated with an extensive knowledge of smart contracts” to pull this off.
Currently, the hacker is still at large due to use of Ethereum mixer confirming the stance of 1inch that it was a very thought out job. According to Balancer, they were not aware that such a scenario could be played out. The CTO of balancer labs claimed responsibility for this hack stating that they would look for ways to prevent such an incident happening in the future. Although this is not the first time DeFi protocols have come under fire, Balancer vowed to take extra measures to strengthen security after this occurrence.