DeFi Project Thorchain Attacked, Draining $4.9 Million Worth of Ethereum

July 17, 2021, 10:30 AM AEST - 3 months ago

Thorchain has suffered a second attack, draining millions in assets from the protocol. The attack was brought on by an unforeseen exploit in the ETH Bifrost allowing for an intuitive attack vector.

Initially it was thought that close to 13,000 Ethereum (ETH) had been stolen but according to an update posted by Runebase, it is now estimated at about 2,500 ETH. The update also stated that “the discrepancy may be due to additional loss from arbitrageurs taking advantage of the price manipulation”.

While the treasury has the funds to cover the stolen amount, we request the attacker get in contact with the team to discuss return of funds and a bounty commensurate with the discovery.

Thorchain Telegram administrator

Other protocols like Rari have also been able to reimburse their proponents after being hacked.

Decentralised Community Protecting the Network

When trying to attack an open-source decentralised protocol, you’re not just attacking the developers but the community as well. Communities and node administrators have various incentives to protect the network, not just for the value they have pumped in, but the value they get out from time and effort spent building and securing the network.

The issue was discovered by a community developer and when anonymous nodes started voluntarily using the “make halt” command to stop their nodes, the emergency was made clear. Once more than a third of the nodes had been halted, the network itself was halted. This was a decentralised action taken by node operators to protect the network.

DeFi Targeted by Attackers

As DeFi is one of the more recent innovations in blockchain and distributed ledger technology (DLT), much of what is happening in the space is innovative. In spaces such as these, there will always be room for improvement and considerations not yet made, but as the space matures so will the knowledge and experience of risks.

So far this year, millions have been stolen in DeFi hacks, in various ways ranging from coding errors to rug pulls. Thorchain was in good stead after its price dropped only 14 percent following the attack. Other tokens like FinNexus (FNX) had dropped 90 percent after being hacked.

As the space matures many lessons will be learnt, but as these exploits occur developers are documenting and fixing them, strengthening protocols and best practices. In the long run, this will work to the advantage of the crypto industry as a whole.

Disclaimer: The content and views expressed in the articles are those of the original authors own and are not necessarily the views of Crypto News. We do actively check all our content for accuracy to help protect our readers. This article content and links to external third-parties is included for information and entertainment purposes. It is not financial advice. Please do your own research before participating.