Arbitrum Stablecoin Exploiter Snagged $300K From 9.7B Token Boost

The “puzzling” attack showed no transfer logs of minting or transferring the infinite number of tokens, a blockchain sleuth said

article-image

Brian A Jackson/Shutterstock.com modified by Blockworks

share

SperaxUSD, a yield automator on Ethereum layer-2 rollup Arbitrum, announced a user was able to explode the balance of their stablecoin tokens over the weekend. 

In a Twitter thread, the team said an exploiter somehow obtained 9.7 billion USDS tokens for barely any collateral and managed to liquidate around $300,000 worth before being blocked by the Sperax and Arbitrum teams.

The Sperax team has identified the account and is in the process of taking action in coordination with centralized exchanges. The liquidated amount will be recapitalized before the protocol’s relaunch, it said. The exploit did not impact the DeFi protocol’s governance token SPA.

Loading Tweet..

SperaxUSD didn’t return Blockworks’ request for comment on further details, but a detailed report was set to be published Monday.

“We have reached out to the exploiter to discuss options and we are hopeful for a peaceful resolution. The issue has been figured out and will be resolved with a smart contract upgrade. Recapitalization will be implemented early next week, then transactions will restart,” the team said.

Code bug?

A blockchain analyst who goes by the name “Spreek” on Twitter provided the likely attacker’s address in a tweet, singling out its Ethereum Name Service as “kochironnosaif.eth.”

The attack was “puzzling” as there were no transfer logs of minting or transferring the infinite number of tokens, nor was there any malicious upgrade to the contract, the sleuth said.

“Therefore I would guess [the] likely cause is [a] bug in rebasing code,” they said.

Blockchain security firm PeckShield said the root cause of the hack was due to an “internal balance accounting discrepancy caused when migrating an account from non-rebasing to rebasing-based accounting.”

Loading Tweet..

SperaxUSD is a “hybrid” stablecoin whose design includes both collateral-backing and an algorithmic stabilization mechanism, according to its white paper.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2023

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report - cover graphics (10).jpg

Research

Kinto's novel L2 prioritizes compliance, security, and the user experience.

article-image

Whether you decide to invest in bitcoin should be up to you, not the SEC or Gary Gensler

article-image

Plus, Sanctum’s upcoming airdrop for its new CLOUD token

article-image

The $887 million of net inflows was the category’s second-best total in a single day since their January launches

article-image

The industry-first general purpose zk programmable blockchain charts a fresh course

article-image

Cause of $300 million-plus “unauthorized leak” still unknown as company gets set for big fundraise

article-image

The term DePIN has become a buzzword — and many projects are misusing it to attract attention