A Decentralized Exchange on Osmosis Suffers $1.14 Million Hack
A decentralized exchange (DEX) built on Osmosis (OSMO) has fallen victim to a hack, resulting in the theft of $1.14 million worth of cryptocurrency. The Levana Protocol (LVN), which specializes in perpetual swaps, announced that it experienced an oracle attack that affected 10% of its liquidity pools.
The Levana team has resolved the issue and plans to relaunch opening positions next week. They assure users that existing liquidity pools are not at risk of further attacks. To compensate affected liquidity providers, the project will distribute future airdrops and protocol fees collected during the hack.
Details of the Exploit
The exploit began on December 13th, when an attacker launched a congestion attack on the Osmosis chain. This attack prevented most Levana users from interacting with Levana markets for a specific period, hindering them from updating the Pyth oracle contract. The combination of insufficient gas prices during congestion and price staleness in Levana’s interaction with Pyth allowed the attacker to drain approximately 10% of Levana pools over a 13-day period.
About Levana Protocol and Osmosis
Levana Protocol introduced its native token, LVN, one month ago. Currently trading at $0.183, LVN has experienced a decline of over 34% in the past week. Osmosis is an automated market maker (AMM) protocol built on the Cosmos (ATOM) software development kit (SDK). Its primary objective is to facilitate cross-chain transactions through inter-blockchain communication (IBC).
Hot Take: Levana Protocol Faces Oracle Attack and Losses
The Levana Protocol suffered a significant setback as it fell victim to an oracle attack, resulting in a loss of $1.14 million worth of cryptocurrency. The exploit took advantage of congestion on the Osmosis chain, enabling the attacker to drain 10% of Levana’s liquidity pools over a 13-day period. However, Levana has taken swift action to resolve the issue and plans to compensate affected liquidity providers through future airdrops and protocol fees. This incident highlights the ongoing security challenges faced by decentralized exchanges and emphasizes the importance of robust security measures in the crypto space.
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