Source: Adobe Stock / Pavel Ignatov
osmosisa Proof-of-Stake (PoS) blockchain with a decentralized exchange application (DEX) within the Cosmos (ATOM) ecosystem, was minted at a value of approximately $5 million.
The project’s official Twitter account confirmed the hack but dismissed claims that the liquidity pools had been completely drained. “Developers fix the bug and narrow the size of the losses (probably in the range of ~[USD]5M) and work on recovery.”
To prevent users from exploiting the vulnerability, network validators stopped the chain.
“As of block #4713064, the Osmosis chain has been halted for emergency maintenance,” said network validator ‘EmperorOsmo(Hathor Nodes)’. “At this time, Osmosis DEX and Wallet are non-functional until repairs are complete.”
The exploit was reportedly possible due to a “critical bug” in the protocol’s liquidity pools, which allowed anyone to increase their position by 50% simply by adding and removing liquidity to any pool. The error might have drained all liquidity pools.
On-chain transactions show that users had already started exploiting the vulnerability before the network was stopped. For example, an address that “executed the error repeatedly for more than 30 minutes” managed to get away with ATOM worth around $75,000 per user “Junønaut”.
According to DeFi Llama, Osmosis currently has a total locked value (TVL) of more than $212.77 million.
The project’s native token OSMO was also compromised by the recent exploit. The token is currently trading at $1.08, down 4.1% over the past 24 hours. It’s down 22% in the last 7 days and 68% in a month.
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