Even though hacks in the crypto space have reduced over the past few months, it doesn’t mean that they are not still happening. While regulators are doing their bit to curb the ongoing acts, all things point to the need for them to up their acts. While the centralized market is still commendable, the decentralized finance sector is still bleeding heavily from recent hacks.
One such hack is the one that took place recently regarding a wide known protocol in the sector, Dodo. In the act that was carried out, the malicious actors were able to cart away with nothing less than $3.8 million, with the act coming in the last 24 hours.
Dodo said it has been able to recover some of the funds
In their report of the act, Dodo mentioned that even though the hackers could move away from such heavy amounts, they are sure that most of the loot will be returned in due time. Dodo is a decentralized exchange protocol in the DeFi sector that deals majorly with the swapping of tokens. The protocols use both the Ethereum and Binance Smart chain blockchain for their activities.
Its modus operandi in the sector is to allow the contribution of tokens to its pool and allowing traders in the sector are carrying out buying and selling activities in the pool. The statement released by the protocol mentioned that about four pools in all were affected, which were the WSZO, FUSI, WCRES, ETHA pools.
Furthermore, in the statement, the protocol mentioned that apart from these pools mentioned, all other pools were not affected, and the funds in them are safe. It also mentioned that the funds that were carted away in its AC pools have been fully recovered and are now under their lock and key.
Hack shows that the DeFi sector is still risky
In the way the attack was carried out, Dodo mentioned that the hackers deployed a bug that allowed them to create multiple tokens, which helped them use a flash load attack. The usage of flash loan attacks in the DeFi sector is now worthy of concern as other platforms have suffered the same fate in the past few years. With the hackers already finished with their jobs, they could draw out the tokens into their wallets, leaving the pools empty.
A breakdown of the stolen funds shows that the hackers stole about $1.5 million worth of Tether and the banking industry-disrupting CrescoFin token worth about $900,000. Dodo was earmarked to be a bigger competition to Uniswap in the decentralized finance sector when it was created. Instead of making use of the Automatic Marker system that Uniswap uses, it makes use of its proactive marker system to match traders with their trades.
In their argument, Dodo said that they were assured of 10x more liquidity with this method than that of Uniswap. This latest hack is the last of the previous ones that have occurred this year, which buttresses the point that this sector is very risky.