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OVIX, a Polygon-based lending protocol, lately suffered a serious setback after being hit by an exploit that price the platform at the very least $2 million.
In response, OVIX quickly halted its POS and zkEVM operations whereas it labored to deal with the difficulty and reduce the impression on its customers.
The intrusion was initially reported by blockchain safety firm CertiK, and was later substantiated by Arkham Intelligence.
The OVIX protocol permits borrowing in opposition to quite a lot of stablecoins, together with Ethereum derivatives and Polygon’s native MATIC token, in addition to Aavegotchi’s staked token, vGHST.
Arkham claims that the exploiter intentionally raised the worth of vGHST to be able to acquire substantial USDC in loans. As soon as on the Ethereum (ETH) mainnet, the hacker exchanged the stablecoins for 757 ETH.
The intruder utilized the borrowed stablecoins to realize entry to the vGHST lending pool and the OVIX lending platform.
Pumping The Value Of GHST
Blockchain knowledge from CoinMarketCap exhibits that they borrowed substantial quantities of vGHST, driving up the worth of the native forex $GHST by as a lot as 25% in simply half an hour.
The perpetrator made off with the collateral and later traded it in for extra tokens.
The Aavegotchi blockchain gaming undertaking makes use of vGHST as its staking token. It serves because the share token for the native Aavegotchi token, $GHST.
Blocksec, a safety and auditing group, has verified that the worth of vGHST was elevated artificially, and that the pricing oracle was tampered with.
The hacker had used the vGHST token to use the protocol, in line with the findings of a research by blockchain safety agency PeckShield.
0VIX is working with its safety companions to look into the present state of affairs that appears to be associated to vGHST.
Consequently, POS and zkEVM markets have been paused this contains pausing oToken transfers, minting, and liquidations.
Solely POS has been presently affected however zkEVM…
— 0VIX | reside on zkEVM (@0vixProtocol) April 28, 2023
In a press release launched on April twenty eighth, OVIX acknowledged the difficulty and stated it was investigating the matter with its safety companions.
In response to CoinGecko, the worth of GHST elevated from $1.13 to $1.41.
OVIX Suspends Buying and selling
OVIX has suspended buying and selling in POS and zkEVM due to the breach. As well as, it was said that this might have penalties for oToken issuance, switch, and liquidation.
Such assaults, recognized within the DeFi group as “value oracle manipulation hacks,” are widespread.
When discussing vulnerabilities in decentralized finance (DeFi) techniques, the time period “value oracle manipulation hacks” is often used.
DeFi platforms can get real-time knowledge on the worth of a number of cryptocurrencies and different property by way of value oracles, that are exterior providers.
Manipulating the costs reported by the oracle or compromising the oracle’s knowledge feed are each strategies of manipulating pricing oracles.
To facilitate different assaults, equivalent to flash loans or liquidity pool exploits, attackers may make the most of this phony info to artificially inflate or deflate the worth of property.
The time period “flash mortgage assault” is used to explain a particular sort of hack used to govern pricing oracles. An attacker on this state of affairs would borrow closely from a DeFi platform, inflate the asset’s precise worth with fabricated knowledge, after which promote it on the inflated value.
As soon as the mortgage is paid again, the attacker retains the proceeds.
Whole market cap of cryptocurrencies as of Sunday unchanged at $1.16 trillion. Chart by TradingView.com
The Problem In Detection
Due to the interconnected nature of many DeFi platforms and value oracles, it may be difficult to detect and forestall manipulation assaults on these techniques.
Safety procedures, equivalent to multi-signature authentication and knowledge verification strategies, needs to be applied by DeFi platforms and pricing oracle suppliers to scale back the probability of those assaults.
Official message to the attacker:At 8am UTC 1 Might 2023 the legislation enforcement course of is scheduled to start within the absence of any funds being returned.We are going to take the leads we’ve gotten to date (thanks to the general public for these), mix it with our tracing we’ve already executed on…
— 0VIX | reside on zkEVM (@0vixProtocol) April 29, 2023
In the meantime, the OVIX protocol has launched a press release, which warns the perpetrators that authorities will get entangled in the event that they don’t reply.
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