This is the first of its kind credit attack on the Binance Smart Chain (BSC).
An erroneous liquidity share calculation in the protocol allowed hackers to steal $ 30 million in funds.
As the crypto market moves towards new innovation and development, development continues to be overshadowed by phishing and hacking attacks. Recently, Spartan Protocol, a community-focused platform that promotes deep pools of liquidity, reported a new attack from hackers.
According to information provided by Spartan, the hackers used an economical way to withdraw $ 30 million of funding from the Spartan pool. Attackers reportedly used $ 61 million worth of Binance Coin (BNB), the native cryptocurrency of Binance Smart Chain (BSC), to overcome this action.
What we know so far –
*Attacker used $61m in BNB to overcome the pools via a as yet unknown economic exploit path to remove roughly $30m in funds from the pools.
Reach out if you can help identify and analyse the exploit.https://t.co/aNTvdzKOeF
— Spartan Protocol (@SpartanProtocol) May 2, 2021
Unfortunately, crypto scams continue to shake the rapidly evolving crypto space. However, Spartan said he was working with the Binance team to come up with a solution to this issue and recover the stolen funds.
Attacking the Binance Smart Chain through the credit system
Blockchain security and data analytics firm PackShield has done some root cause analysis on the subject. The firm noted that “the incident was caused by an erroneous liquidity share calculation in the protocol.” This allowed hackers to use the protocol and drain assets from their pool. In a brief summary, the blockchain security firm explained:
This incident was due to an erroneous logic in calculating the liquidity share when the token was burned to withdraw underlying assets. Specifically, a particular hack inflates the pool’s asset balance before burning the same amount of tokens to claim unnecessarily large amounts of underlying assets. The result of this attack results in losses of more than $ 30 million in the affected pool.
As China’s popular crypto analyst Wu Blockchain explains, this is the first of its kind credit attack on the Binance Smart Chain. In September 2020, BSC Project imitating Syntetix was attacked when it landed on the Binance Exchange.
After reaching an all-time high of $ 641 earlier today, the BNB price dropped 1.1% at the time of writing. At the time of writing, BNB is trading at a price of $ 616 with a market value of $ 95 billion.