Allbridge Pauses Protocol After $1.65M Exploit Drains Stablecoin Liquidity Pools

[Oshosondy]

Just as usual, another DeFi has been attacked. This is not the first time it was attacked, Allbridge has faced a similar attack before. In April 2023, the protocol lost around $573,000 in a flash loan exploit on BNB Chain. The attacker took advantage of a bug in the smart contract to manipulate token swap prices, which allowed them to steal about $289,900 in BUSD and $290,900 in USDT. This time it was  $1.65 million.

You can read about the recent one
https://cryptopotato.com/allbridge-pauses-protocol-after-1-65m-exploit-drains-stablecoin-liquidity-pools/

DeFi exploits is happening so often.

[Odusko]

What I noticed with recent hacks and exploit from all the Defi liquidity, is that the amount keep decreasing which shoe how investors motivation in defi is decreasing alot recently, all the hacks reported in recent time is not so much significant amount it hard we see Defi exploits that shart away with millions of dollars, all are within the hundreds of thousands dollar's.
Defi protocol need alot of security upgrades because of the current network protocol os exposeto alot of possible exploit asides from insider exploits, which is another challenge with Defi.

[o48o]

Just as usual, another DeFi has been attacked. This is not the first time it was attacked, Allbridge has faced a similar attack before. In April 2023, the protocol lost around $573,000 in a flash loan exploit on BNB Chain. The attacker took advantage of a bug in the smart contract to manipulate token swap prices, which allowed them to steal about $289,900 in BUSD and $290,900 in USDT. This time it was  $1.65 million.

You can read about the recent one
https://cryptopotato.com/allbridge-pauses-protocol-after-1-65m-exploit-drains-stablecoin-liquidity-pools/

DeFi exploits is happening so often.

Friend of a friend was just bragging to me DEXes as a future of finances. And when genuinely snickered (because i wasn't prepared for that comment), he told me that i don't just understand cryptos. And how safe they are compared to banks.

I am actually happy that so many people don't know that i have a history in cryptos, so i don't get targeted. But i just had to respond something without oversharing everything. So i quickly gathered majority of hacks mentioned in here. Then i asked if old timey finances have this kind of problem.

He went silent and i saw he was trying to respond but all he got was: "They can freeze your bank account". Which isn't really a good argument, considering that they can literally confiscate your computer, drives and lock you up as well. If you don't lose your money because of an exploit, just a man with a $5 wrench can get your wallet easily, because you don't have same security as your bank does.

I however didn't even bother to explain that as i am bored to death having arguments with fanatics.

[asriloni]

I have explained that in the past about how defi ain't defi. It's basically a webapp with so many loopholes that still remain undiscovered. The fact that the growth of AI agents basically a serious threat to the defi because it provides a tool for anyone to scan the loopholes that might not be discovered by the audit.

And also allbridge hack is obviously increasing the amounts of money got hacked by Defi in the last 60 days. Things such as message verification, smart contract trust model, flash loan and etc make defi so fragile from getting hacked.

It's also very sad the retails have always been the victim. So i emphasize it again defi is not safe place.

[jossiel]

I haven't used this defi but since there were a lot of news in the past that they've always been exploited. I got scared.

Though there's a huge percentage of return for these LPs. I am not attracted to them when these attacks have became occasional.

What I noticed with recent hacks and exploit from all the Defi liquidity, is that the amount keep decreasing which shoe how investors motivation in defi is decreasing alot recently, all the hacks reported in recent time is not so much significant amount it hard we see Defi exploits that shart away with millions of dollars, all are within the hundreds of thousands dollar's.

That's because lesser people are trusting them, the more news like this, the bigger decrease in volume and hacks we'd see.

[Exitoral]

I have explained that in the past about how defi ain't defi. It's basically a webapp with so many loopholes that still remain undiscovered. The fact that the growth of AI agents basically a serious threat to the defi because it provides a tool for anyone to scan the loopholes that might not be discovered by the audit.

And also allbridge hack is obviously increasing the amounts of money got hacked by Defi in the last 60 days. Things such as message verification, smart contract trust model, flash loan and etc make defi so fragile from getting hacked.

It's also very sad the retails have always been the victim. So i emphasize it again defi is not safe place.

The funny thing about this is that the hacks are frequent and it seems the DeFi developers have no clue on how this scams is carried out or they haven't really found a way to extremely slow the hackers down. And with all this, it is retailers that are paying the price like you said.  Pretty sure there is no compensation for them. If there is,  I would love to know.

But even though AI is used to attack, can't the developers still use it to secure the network. Is that really hard?

But still, I won't call all DeFi insecure like you did.

[hugeblack]

The good side of the story is that we no longer hear about a complete failure, but rather about the exploitation of some bugs in smart contracts that lead to a temporary depletion of liquidity.

The bad side is that such attacks are becoming repeated on a weekly basis, which means that most of these DeFi attacks are duplicates.

Why didn't Binance freeze these amounts, especially since they are in BUSD? Is this token still working?

[JeromeTash]

The funny thing about this is that the hacks are frequent and it seems the DeFi developers have no clue on how this scams is carried out or they haven't really found a way to extremely slow the hackers down. And with all this, it is retailers that are paying the price like you said.  Pretty sure there is no compensation for them. If there is,  I would love to know.

But even though AI is used to attack, can't the developers still use it to secure the network. Is that really hard?

But still, I won't call all DeFi insecure like you did.

The problem is most of those developers just do copy-paste when it comes to the smart contract, so if there is a vulnerability in one protocol... Chances are so high that more other protocols might have a similar security flaw.

Smart contracts are visible to the public, so discovering vulnerabilities shouldn't be hard. AI can do as much as it can, but it's not perfect in mitigating the attacks. Remember, all systems appear secure until a breach happens.

[ultrloa]

The good side of the story is that we no longer hear about a complete failure, but rather about the exploitation of some bugs in smart contracts that lead to a temporary depletion of liquidity.

The bad side is that such attacks are becoming repeated on a weekly basis, which means that most of these DeFi attacks are duplicates.

Why didn't Binance freeze these amounts, especially since they are in BUSD? Is this token still working?

Maybe the reason why they didn't freeze BUSD is that token is in wind down mode situation, also Paxos has stopped minting BUSD I think since 2023. Maybe by this Binance just treat it up as an legacy asset and they are not active stablecoins at this point.

BUSD has been phase out and maybe this is one of the reason why monitoring and the control of the one issues this coin became limited. This is the reason why even if we see stolen liquidity has been move on BUSD. Binance it self cannot freeze and control its demand, since the structure of that token is not active anymore.

[asriloni]

I have explained that in the past about how defi ain't defi. It's basically a webapp with so many loopholes that still remain undiscovered. The fact that the growth of AI agents basically a serious threat to the defi because it provides a tool for anyone to scan the loopholes that might not be discovered by the audit.

And also allbridge hack is obviously increasing the amounts of money got hacked by Defi in the last 60 days. Things such as message verification, smart contract trust model, flash loan and etc make defi so fragile from getting hacked.

It's also very sad the retails have always been the victim. So i emphasize it again defi is not safe place.

The funny thing about this is that the hacks are frequent and it seems the DeFi developers have no clue on how this scams is carried out or they haven't really found a way to extremely slow the hackers down. And with all this, it is retailers that are paying the price like you said.  Pretty sure there is no compensation for them. If there is,  I would love to know.

But even though AI is used to attack, can't the developers still use it to secure the network. Is that really hard?

But still, I won't call all DeFi insecure like you did.

The problem is that sometimes, they are not the party who created the code instead they forked it from another project. So they being so clueless what's potential loopholes available in their app. A part from that defi these days seem being careless to the regular security audit or hackathon.

No doubt that they have always targeted by the hackers. Just a small bug can cost them millions. It's getting tougher with how AI can also be used to exploit while the developers who created defi were also dumb enough to understand how important agent these days especially in founding the bug.

Other than that i just say that about the fact we have tons of defi got exploited, and billions of money went to hackers everyyear. So what i said basically refers to reality.

[elda34b]

Just a small bug can cost them millions. It's getting tougher with how AI can also be used to exploit while the developers who created defi were also dumb enough to understand how important agent these days especially in founding the bug.

Biggest surprise is how much money people actually have today. I find it hard to imagine those who deposits have no understanding about the risk associated with smart contract exploits. But they keep using them, not on one platform but many websites too. Maybe they're not the same person, but the market is definitely huge.

Then again, I do agree that developers definitely need better skills to code the contract. They can't really get away with saying it's not their responsibilities if they still want the market to exist for long-term.

[zasad@]

Just a small bug can cost them millions. It's getting tougher with how AI can also be used to exploit while the developers who created defi were also dumb enough to understand how important agent these days especially in founding the bug.

Biggest surprise is how much money people actually have today. I find it hard to imagine those who deposits have no understanding about the risk associated with smart contract exploits. But they keep using them, not on one platform but many websites too. Maybe they're not the same person, but the market is definitely huge.

Then again, I do agree that developers definitely need better skills to code the contract. They can't really get away with saying it's not their responsibilities if they still want the market to exist for long-term.

Many people lose money in business, and traders lose money on centralized exchanges.
You're mistaken if you think there's less risk in other areas of business or investment. I suggest looking at it from the other side: if people invest in such projects, it means they've earned their capital and know how to manage risk. They will lose some of their investment, and the other part will be profitable.