Exploit on Levana Protocol Results in Loss of $1.1 Million
The Levana perpetual swap protocol on the Osmosis blockchain experienced a significant exploit that led to the loss of more than $1.1 million from its liquidity pools. The attack took place over a period of 13 days, during which the attackers drained 10% of the pools.
Congestion Attack and Price Manipulation
The attackers took advantage of a congestion attack on the Osmosis chain, which caused difficulties for Levana users in interacting with the markets. Additionally, a bug in the fee market code and “price staleness” in Levana’s integration with the Pyth oracle allowed the attackers to manipulate prices and drain the pools.
Fix and Compensation
Levana is actively working on a fix that will be implemented in an upcoming code upgrade across Osmosis, Sei, and Injective chains. While existing trade positions and profits remain unaffected, new positions and modifications are temporarily suspended until the scheduled update next week.
To compensate affected liquidity providers, Levana plans to distribute an airdrop and collected protocol fees from the attack period.
Hot Take: Levana Exploit Highlights Vulnerabilities in DeFi Protocols
The recent exploit on Levana serves as a reminder of the vulnerabilities that exist within decentralized finance (DeFi) protocols. Despite efforts to enhance security measures, attackers continue to find loopholes and exploit weaknesses in these systems. This incident highlights the importance of thorough testing, continuous monitoring, and prompt fixes to ensure the safety of user funds. As DeFi continues to grow in popularity, it is crucial for developers and users alike to remain vigilant and proactive in mitigating risks associated with these platforms.
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