bEarn Fi, a cross-chain auto yield farming protocol, was exploited, resulting in a loss of near $11 million
Perhaps Binance Smart Chain is becoming increasingly dangerous as it continues to have decentralized finance (DeFi) flash loan exploit, which is bEarn Fi, a cross-chain auto yield farming protocol. This project suffered $11 million in damages.
BEarn Fi’s official Twitter account wrote at around 9:31 a.m. EST Sunday, May 16:
No other bVault has been affected but we have taken a precautionary measure and temporarily paused withdrawals and deposits for all bVaults. 2/3
— bEarn Fi (@BearnFi) May 16, 2021
Hacker exploited smart contracts to drain BUSD pools, bEarn Fi algorithmic stablecoin BDO dumps to $0.24
The Binance Smart Chain (BSC) based cross-chain auto yield farming protocol bEarn reported the incident which resulted in the draining of the bVault BUSD Alpaca strategy. A little over $10.8 million BUSD was stolen by an attacker who used flash loans to exploit the system.
bEarn Fi is a DeFi protocol that provides yield generation, an algorithmic stablecoin called bDollar, bridges, and gaming aggregation on BSC and Ethereum. The protocol announced that it would be compensating victims of the hack along with a post mortem of events that led to the incursion.
The report explains that the crash was the result of improper execution of the withdrawal function, adding that a mistake in the use of the smart contract since its launch allowed the strategy to withdraw multiple BUSD. more than necessary.
The attacker took out a quick loan on Cream Finance for 7.8 million BUSD and used this to deposit and withdraw from bVaults about 30 times. The attacker then withdrew 8.26 million BUSD and quickly paid the loan.
bEarn contacted Binance to block the attackers’ addresses and prevent them from transferring funds. It also freezes all of its bVaults to prevent any further losses and contacts security companies for code analysis. A snapshot is also taken of the liquidity provider addresses to work on a compensation plan.
Statement protocol:
“We will create a compensation fund which will consist of a combination of the remaining saved funds, Dev Fund, DAO Fund, and a portion of fees generated by the protocol.”
At press time, bEarn’s algorithmic stablecoin is down 11% on the day and is trading under a dollar at $0.24.
Users will be compensated with 87.5% of their deposit in BUSD instantly along with an additional 7.5% in BDOv2 (bDollar) tokens. The final 10% that will be in the BDEX will be released over time, resulting in a total withdrawal of 105%.
As attacks escalate, compensation schemes become more and more frequent and all DeFi projects will likely need to allocate a portion of their token supply for purposes such as so.
On May 16, staking platform xToken has allocated 2% or 20 million tokens to compensate the victims of a similar mine in which it lost $24 million. Rari Capital, mined on May 8 also using quick loans, has similarly planned to use 2 million tokens to repay the victims.
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