Defi Protocol bZx Hacked Again Losing Over $8 Million

The DeFi protocol bZx was hacked again and lost more than $ 8 million worth of crypto due to its smart contract’s faulty code.

14 September 2020 | AtoZ Markets – Crypto tokens have long been criticized, but decentralized financial (DeFi) applications changed the story. bZx is a DeFi smart contract designed on Ethereum (ETH) that allows to leverage and margin trade without third party.

Defi Protocol bZx Lost $8 Million Due to a Faulty Code

The DeFi protocol bZx has been hacked again due to a coding bug. This time it has lost users deposits more than $ 8 million or 30% of bZx’s total assets locked. The bug allowed the attacker to duplicate assets and increase the balance of iTokens (bZx interest-bearing tokens).

Co-founder Kyle Kistner said they realized something was wrong on Sunday. That day, bZx faced a $2.6 million decline in the Protocol’s Total Value Lock due to a single LINK token withdrawal. There was a vulnerability in the “transferfrom0 protocol”. It allows hackers to make successful ERC20 transactions between protocols.

Hackers have used this bug to exploit 219,200 LINK tokens (around $2.6 million), 4,503 ETH (around $ 1.6 million), 1,756,351.27 USDT, 1,412,048 USDC, 667,989 DAI (around $ 680,000). That’s a total of $ 8.1 million. bZx suspended the protocol to fix a bug but resumed operation hours later. But bZx said the insurance has covered the loss, and there is no risk to the user’s funds. Kyle Kistner also said:

“No funds are at risk. Due to a token duplication incident, the protocol insurance fund has transiently accrued a debt. The insurance fund is backstopped by both the token treasury in addition to protocol cash flows.”

Earlier, bZx protocol applied a patched, which is approved by two audit firms Certik and Peckshield. However, Kistner points out that these audit firms have failed to identify recent bugs.

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