There is an important development in the Bitcoin and altcoin world today. In the world of decentralized finance (DeFi), security breaches can lead to significant losses. The Onyx DeFi protocol was recently subjected to a hack. Accordingly, 2.1 million dollars were seized by the hacker. This incident raised concerns about vulnerabilities in DeFi systems. On the other hand, he emphasized the need for stronger security measures.
Vulnerability in altcoin protocol
The breach in the Onyx DeFi protocol was orchestrated through a specific vulnerability known as “precision loss.” Analysts from cybersecurity firm BlockSec identified this weakness in Onyx’s codebase. The attacker took advantage of an integer rounding problem. Moreover, more importantly, he realized this vulnerability with the help of a flash loan. There was significant damage for the altcoin.
BlockSec’s Director of Security Services, Matthew Jiang, shed light on the attacker’s modus operandi. The attacker obtained a significant amount of ETH by initiating a flash loan. Accordingly, he then exchanged this ETH for the altcoin PEPE. The attacker then donated money to a specific pool to manipulate the altcoin exchange rate. Specifically, due to the “precision loss”, the attacker was able to withdraw more of the underlying asset while burning less shares. This method is similar to a previous attack on Hundred Finance. It is worth noting that this vulnerability can be traced to an older version of Compound V2 integrated into Onyx’s core architecture.
Developments after the attack
As the security breach was revealed, the attacker’s actions became apparent through on-chain data. They transferred 700 altcoins ETH, worth approximately $1.25 million, to the crypto mixing service known as Tornado Cash. This service is often used to hide the origin of cryptocurrency transactions. The protocol hacker didn’t stop there. He continued to take his steps. Accordingly, the hacker has already laundered 100 ETH in Tornado Cash. The development was reported by PeckShieldAlert, which specifically tracks hacker addresses on the chain.
The vulnerability that caused a loss of $ 2.1 million in the Onyx DeFi protocol attracts attention in the cryptocurrency world. Accordingly, it underscores the ongoing challenges DeFi platforms face in providing robust security. The use of precision loss vulnerabilities and flash loans raises concerns about the vulnerabilities inherent in the code base. These incidents serve as a stark reminder of the importance of implementing stringent security protocols across the DeFi ecosystem to protect users and assets from potential threats. When we look at it as Kriptokoin.com, the continuation of hacks in the altcoin world inevitably makes investors nervous.