DeFi on Bitcoin: 1 million dollars disappeared following a hack
Unhealthy and creative chaos – Sovryn, a lending and borrowing protocol based on Bitcoin (BTC), was the victim of an attack, the bill of which amounts to seven figures for the platform and its users.
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Sovryn hack: a complex cocktail of simple operations, for a significant loot in RBTC and USDT
On October 4, the DeFi protocol Sovryn was the victim of an attack that cost the platform more than a million dollars in cryptocurrencies. Sovryn is built on Bitcoin’s RSK sidechain. Its users can borrow RSK Smart Bitcoin (RBTC), a token that is pegged to Bitcoin.
The platform was quick to publish a updateur to provide further details on this exploit. In a few words and in a simple way, the modus operandi is a complex cocktail of transactions, combining various classic operations for a crypto investor.
The method consists of several back and forths: security deposit to borrow cryptocurrencies, purchase of tokens, liquidity pool supply, loan closing, and other movements, between different protocols.
All this commotion was aimed at exploit a vulnerability to manipulate the price of iRBTC, which are iTokens offered to liquidity providers in a loan pool. These iRBTC representing the share of cryptocurrencies they hold in the lending pool, and entitle them to interest.
This manipulation of the iRBTC price ultimately allowed the attacker to withdraw a higher amount of RBTC, compared to its initial deposit in the pool. The exploit mostly hit the BRTC and USDT lending pools. The loot includes 44.93 RBTC and 211,045 USDT.
According to Sovryn, the developers would still “managed to recover about half the value of the exploit”. Unsurprisingly, protocol spokesman Edan Yago tried to qualify the importance of this attack to ensure user confidence, recalling that this is the first successful exploit against Sovryn since its two years of operation.
Sovryn further claimed that its treasury, Exchequer, “will feed any missing value back into the loan pools. In other words, the protocol thus undertakes to reimburse the tokens lost, due to this attack.
Crypto protocols must increasingly strengthen their security, in the face of particularly motivated hackers who demonstrate ingenuity. A few days after the Sovryn attack, hackers attacked the Binance Smart Chain (BSC).
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