The year 2020 has seen many developments within the cryptocurrency sector, one of which was Decentralized Finance (DeFi). DeFi has seen massive popularity in the last year, with billions of dollars locked on various DeFi platforms and new DeFi-based products being introduced every day.
However, this increased interest and publicity surrounding DeFi has also made it a target for dishonest individuals who often go after cryptocurrency-related platforms. A number of DeFi platforms fell under attack this year and it seems such incidents have repeated themselves. On November 17, 2020, the Origin Protocol, a stablecoin project, was reported to have suffered an attack.
Origin Protocol targeted
The attack in question was a re-entrancy attack and it occurred at 00:47 UTC on November 17. As a result of the attack, a reported $7 million was lost. Of the money lost. $1 million was deposited by employees and founders of Origin.
In view of the incident, deposits to the platform have been disabled. Additionally, the market price of their native OUSD has seen an 85% reduction. The management of the token, which is backed up by deposits of USDT, USDC, and DAI, has urged the public not to purchase OUSD from Uniswap or SushiSwap. The reason for this is that the quoted prices on those exchanges do no reflect the adequate market value of the token.
The attack took place via a flash base and also took advantage of bugs within the OUSD contract to initiate a rebase. This, in turn, was used to artificially increase the supply of the token within the ecosystem and the excess supply was traded on SushiSwap and Uniswap for USDT.
“The attacker was able to create a rebase event inside the second mint after funds had moved to OUSD from the first large mint, but before the supply of OUSD increased. This created a massive rebase for everyone in the contract, including the attacker. The attacker then also received their first large OUSD mint, giving them in total more OUSD than the contract had assets,” management for Origin Protocol said.
A bad history of DeFi
Unfortunately, this is not the only attack that DeFi platforms have suffered this year. In February, DeFi lending protocol bZx suffered two flash loan attacks with $954,000 lost in total.
Two months later, DeFi platform PegNet suffered a 51% attack after a group of miners was able to control 70% of the network’s hash rate. $6.7 million worth of tokens were fraudulently created.