Onyx Protocol Loses $2.1 Million in Hack
Onyx Protocol, a decentralized peer-to-peer lending platform, fell victim to an exploit that resulted in a loss of approximately $2.1 million. The hack took advantage of a market with no liquidity, which was deployed on October 27. Blockchain investigator PeckShield discovered that the hacker exploited a known bug related to the popular CompoundV2 fork, specifically a rounding issue. The protocol was unaware of the hack until PeckShield alerted them.
The Exploited Market and Rounding Issue
PeckShield’s investigation revealed that the oPEPE market, which lacked liquidity, was “abused with donation to borrow funds from other markets with liquidity.” The hacker then redeemed the donated funds by exploiting the known rounding issue. This is not the first time this bug has been exploited, as Hundred Finance, another multichain lending protocol, suffered a similar attack on April 16, resulting in a loss of $7 million.
Hundred Finance’s Attack
In the case of Hundred Finance, the attacker manipulated the exchange rate between ERC-20 tokens and hTOKENS, enabling them to withdraw more tokens than they had originally deposited. CertiK reported estimated losses of around $7.4 million for this attack.
Combatting Hack Attempts
These incidents highlight the need for a deeper understanding of tracking cryptocurrencies to combat consistent hack attempts from bad actors.
Hot Take: Strengthening Security Measures in DeFi
The recent hacks targeting Onyx Protocol and Hundred Finance underscore the importance of strengthening security measures in decentralized finance (DeFi). As DeFi continues to grow and attract more users and assets, it becomes crucial for protocols to prioritize robust security systems and thorough audits to identify and address vulnerabilities. Additionally, users should exercise caution when participating in DeFi platforms and conduct thorough research to assess the security practices and track records of the protocols they engage with. By taking proactive measures to enhance security, the DeFi ecosystem can better protect user funds and foster trust in the industry.
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