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There are high ceilings and low floors when it comes to crypto at times. Another hack came to life this week, and early reports have stated that the hack was a front-end compromise that led to users being tricked into approving unwanted transactions.
The news comes after a $35M DeFi hack of the Vee Finance protocol in recent months, and our team at NewsBTC reported around mid-year that crypto hacks and fraud were on pace for a record year.
This week’s BadgerDAO compromise is one of DeFi’s biggest yet.
BadgerDAO Hack: What We Know
The protocol cited “reports of unauthorized withdrawals of user funds” on late Wednesday, and proceeded to pause all smart contracts on the protocol:
Badger has received reports of unauthorized withdrawals of user funds.
As Badger engineers investigate this, all smart contracts have been paused to prevent further withdrawals.
Our investigation is ongoing and we will release further information as soon as possible.
The BadgerDAO Token (BADGER), suffered a roughly 20% drop following the news of the hack. The platform is geared towards earning yield on bitcoin through various vaults.
Blockchain auditing firm PeckShield reported in the early hours on Thursday that the loss was north of $120M, spanning across over 2 BTC and over 150 ETH and going all the way across. However, a variety of assets were compromised during the hack. There were several big wallet losses, including a $5M swoop in one transaction. PeckShield has also released a list of transactions of the hacked funds, but also in the early Thursday hours stated that it “look(s) like good progress has been made. Fingers crossed!”
All things considered, the BADGER coin has held up relatively strong in light of this week's hack. | Source: BADGER-USD on TradingView.com
Related Reading | Cardano Records Over 20 Million Transactions Ahead Of DEX Launches
Backlash & The Bigger Picture
As to be expected, the community reception to this news was less than ideal. Many Twitter replies from users noted their heartbreak from loss of funds. Some users even went on to suggest that the hack was a rug, given that it was seemingly a front-end attack.
Some further speculation came around a loss of funds from CeFi platform Celsius Network. However, thus far, the notes around Celsius seem to be only rumors with little substance. Only time will tell if more firm details come to light, or if Celsius makes a statement around the rumors.
Furthermore, many community members noted that the protocol “pausing” the smart contracts – as sensical as it is to protect user funds – goes against the principles of decentralization.
The continued emergence of insurance programs should bode well for DeFi in general. Our team at NewsBTC wishes only the best for the BadgerDAO protocol and it’s users.
Related Reading | Bitcoin And Omicron: Is Another Black Swan Brewing?
Featured image from Pexels, Charts from TradingView.com
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