Cryptocurrency News Today – Headlines for June 29

Set of cryptocurrencies with Bitcoin, Etherium, Ripple, Litecoin. Cryptocurrencys new digital money. Bitcoin on the front as the leader. Bitcoin as most important cryptocurrency.
  • Hacker steals $500,000 in Ethereum from DeFi app
  • The attacker used a smart contract to manipulate the Balancer Pool
  • Hacks aren’t the only issue that DeFi’s face

Cryptocurrency News Today – Steven Zheng an admin at Telegram group noticed an issue with Balancer. Balancer is a DeFi protocol that focuses on token swaps. Zheng wrote:

Someone just drained a Balancer Pool containing WETH and STA. The attacker made away with $500k worth of digital assets.”

Hours after Zheng’s tweet, 1inch and Mike MacDonald confirmed the attack. 1inch is an Ethereum-based DeFi exchange. Mike McDonald, is the co-founder of Balancer Labs the entity behind Balancer’s development. According to the breakdown given by 1inch, Zhang’s initial post was correct. It confirmed that $500,000 worth of Ether and other digital assets were stolen during the heist.

The Hacker Used A Smart Contract to Manipulate the Balancer Pool

An investigation found that the hacker used a smart contract to facilitate the manipulation of the Balancer Pool which caused it to go into debt. According to the exchange:

The stolen funds were swapped WETH to STA back and forth up to 24 times which allowed the attacker to drain STA from the pool. Each time the attacker swapped the WETH to STA, the Balancer Pool got 1% less STA.”

After this, the user used a vulnerability to drain Ethereum, Synthetix, Bitcoin, and Chainlink from the pool. The value of the funds stolen by the attacker amounts to $500,000 in cryptocurrency. The issue can be described as a byproduct of the deflation of STA to an extent. The token comes with an algorithm built-in to:

Make sure 1% of the sum transacted that for every transaction is destroyed.”

1inch classified the cybercriminal as a:

smSophisticated smart contract engineer who has extensive knowledge of the top DeFi protocols.

It is mainly because of the tactics employed for the hack. The hacker is now at large after using an Ethereum mixer to hide their identity and links to the exchange.

Hacks aren’t the Only Issue That DeFi’s Face

Hacks are not the only issues that the DeFi ecosystem is currently facing. According to one investor at Digital Currency Group, Larry Sukernik, DeFi products are highly complex for their good. Here are his words:

A high IQ can serve as a headwind for creating highly successful products. There are people with big brains available to work. When they are put to work, they provide a complex result. Brilliant, but most complex and unusable products. Lots of that are in DeFi.”

Additionally, there are concerns about the high transaction rates on the network. According to BlockTown Capital’s Joseph Todaro:

If fees go higher or maintain the current level, we expect ETH’s competitors to stay focused on scalability to gain increased attention.”

Princess Ogono is a writer, lawyer and fitness enthusiast. She believes cryptocurrencies are the future. When she's not writing, she spends time with her adorable cat, Ginger and works out often.

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