DeFi Protocol Gamma Strategies Falls Victim to Exploit
Gamma Strategies, a DeFi protocol on Ethereum, experienced a hack resulting in a loss of around $3.4 million. The protocol quickly took action to prevent further losses by temporarily disabling deposits to public DeFi vaults while allowing withdrawals for users needing access to their funds.
Identification of the Exploit and Root Cause
The exploit was first discovered by PeckShield, a blockchain investigator, and later confirmed by Gamma Strategies. The platform revealed that the root cause of the incident was related to the price change threshold settings, which were set too high. This allowed the attacker to manipulate prices and generate a large number of LP tokens.
Actions Taken and Future Plans
To address the issue, Gamma Strategies plans to adjust all price change thresholds to safer levels and conduct a third-party code review. They will also release a post-mortem analysis in the near future. However, it is unclear if the protocol will compensate victims or focus on recovery for affected users.
“Even though deposits are closed, our rebalances and management of positions are still active as they are not affected by the exploit.”
Another Hack in 2024
In addition to Gamma Strategies’ hack, Orbit Chain, a cross-chain bridging project, was also targeted in an attack resulting in a loss of over $80 million. The attacker gained access to seven out of ten multisig signers, leading to a total loss of $81.5 million. The stolen funds primarily consisted of stablecoins, WBTC, and ETH.
Hot Take: DeFi Exploits Continue to Pose a Threat
The recent hacks on Gamma Strategies and Orbit Chain highlight the ongoing vulnerability of DeFi protocols. Despite efforts to implement safeguards, attackers still find ways to exploit weaknesses in the system. It is crucial for DeFi projects to conduct thorough code reviews, set appropriate thresholds, and continuously enhance security measures to protect user funds. As the popularity of DeFi grows, so does the need for robust security practices to prevent future exploits.
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