Understanding the Hack: What Happened?
On May 5, decentralized finance (DeFi) protocol Deus Finance found itself reeling from a cybersecurity disaster. The culprit? A savvy hacker who exploited a flaw in the BNB Smart Chain, leading to a staggering loss exceeding $6 million. Its stablecoin, DEI, was at the center stage of this calamity.
The Mechanics Behind the Exploit
The attack unfolded with a bot taking the reins, initially draining over $1.3 million from BSC. However, the hacker wasn’t done yet; they subsequently set their sights on the Arbitrum network, resulting in an additional loss of more than $5 million. Various Twitter users chimed in post-attack, attributing the breach to what appeared to be a “basic implementation error” in the token contract.
“It appears to be a public burn vulnerability, with a loss greater than $1.3 million at BSC,” tweeted PeckShield.
Deus Finance’s Response
Upon confirming the attack, Deus Finance swiftly paused all contracts and resorted to burning DEI tokens to halt further damage. “We are currently in the process of comprehending the actual backing of DEI tokens,” noted the Deus team on Twitter, emphasizing their commitment to transparency.
Market Impact: The Aftermath
As you might expect, the fallout on the market was significant. DEI saw its price plummet by 30%, dropping to $0.20, far below its intended peg of $0.30. This isn’t merely a flash-in-the-pan event; last year, this stablecoin had already lost its $1 peg following the infamous Terra collapse.
A Troubling History
This breach isn’t an isolated incident. Deus Finance was previously victimized in March 2022 by a flash-loan attack, resulting in $3 million evaporating in Dai and Ether. The exploiters, as uncovered by PeckShield, cleverly funneled the stolen funds using the now-notorious crypto mixer, Tornado Cash.
Conclusion: What Lies Ahead?
Deus Finance, known for facilitating trading across both digital and non-digital assets on the Ethereum blockchain, now faces the daunting task of rebuilding trust among its users. With the promise of a recovery plan in the offing, users will keenly watch how Deus Finance maneuvers through this crisis.
