Cross-chain decentralized exchange (DEX) THORSwap appears to be on the path to recovery after the THORChain network was taken offline following major exploits just three months after entering its guarded launch.
The Cosmos-powered network aims to support decentralized trades executed across different blockchain networks such as Bitcoin (BTC) and Ethereum (ETH). According to an Oct. 12 progress report, the team behind the project’s decentralized exchange THORSwap has so far restored functionality for four of the five networks it supported prior to going down in July.
The update states that THORSwap has resumed swap functionality across the Bitcoin, Bitcoin Cash (BCH), Litecoin (LTC), and Binance Smart Chain networks, adding that the team is currently in the process of reinstating support for Ethereum.
2. Got exploited but hardened and became stronger than ever.
3. Recovered 4 chains and is in the process of recovering the last chain – Ethereum.
1/7
— THORSwap ⚡ ᚱ (@THORSwap) October 12, 2021
THORSwap added it is working to integrate support for the Terra stablecoin network and the Cosmos’ decentralized finance hub, Gaia. Further integrations with other crypto assets, including Dogecoin (DOGE), Decred, Haven and Monero (XMR), are also under development.
The team is also working to improve the performance of network nodes.
THORSwap’s highly guarded “chaosnet” was partially launched in April, following the launch of THORChain’s initial systems in July 2020.
Despite apparent early success, the THORChain network would suffer three hacks during June and July, forcing it to take some services offline.
Related:Possible ‘white hat hacker’ exploits THORChain for $8M, proposes 10% bounty
THORChain was initially exploited in June. However, the team downplayed the incident at the time, stating that the first exploit attempt was limited to $140,000, “which is a small amount compared to other exploits.”
The network was exploited again for a much larger $7.6 million in Ethereum on July 16 after a hacker discovered a vulnerability resulting in the suspension of operations. THORChain was attacked for a third time on July 23 when a hacker exploited the network’s Ethereum router to steal $8 million worth of ETH.
“It’s been a tough time for THORChain during the last few months, but fundamentals never changed,” said the THORSwap team.
SushiSwap (SUSHI) prices crept higher on Sept. 16 following another day of gains for decentralized exchange (DEX) tokens.
The SUSHI/USD exchange rate rose by 7.54%, or $1.14, to reach $16.31 for the first time since May 21. The pair’s upside move pushed its 24-hour adjusted timeframe profits up to 23%, making SUSHI the best-performing DEX token in the given period.
For instance, UNI, the token representing the leading DEX Uniswap by market cap, jumped 6.23% against the U.S. dollar in the previous 24 hours. Meanwhile, PancakeSwap (CAKE) rose 2.5%, THORChain (RUNE) climbed circa 13%, and Curve (CRV) inched higher by over 4.5%.
The performance of top DEX tokens in the previous 24 hours. Source: Messari
Why is SushiSwap leading the DEX pack?
Decentralized finance sector analyst Kris Kay noted that SushiSwap, as a DEX platform, has lately branched out to more blockchains than its peers. As a result, it has been generating more fees for its users, thus raising the prospect of holding SUSHI tokens.
Specifically, the latest bout of buying in SUSHI markets came a day after SushiSwap announced its deployment on Arbitrum, a layer-2 scaling solution for Ethereum-powered decentralized applications or DApps.
With super fast transaction speeds, you never have to sit and wait for tx confirmation again at https://t.co/aoFOsbikeu.
Just try switching your network to Arbitrum today!
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$30M TVL and counting… pic.twitter.com/qgmybXWhjt
— SushiChef (@SushiSwap) September 15, 2021
It also revealed that stakers had locked $30 million worth of SUSHI tokens into Arbitrum’s smart contracts.
Kay noted that SushiSwap’s efforts to scale its DEX solutions across multiple layer-1 and layer-2 chains also cater to its ecosystem’s growth. For instance, the platform has launched many new services in recent months, including DeFi liquidity provider Onsen and lending/borrowing dapp Kashi.
On Sept. 2, SushiSwap also unveiled its upcoming non-fungible token (NFT) marketplace, dubbed Shoyu. The sales volumes for blockchain-verified unique digital collectibles grew from $13.7 million in the first half of 2020 to $2.5 billion in the first half of 2021.
SUSHI price outlook
As a result, SUSHI has beaten its DEX rivals in terms of interim returns. Its profits in the previous seven days sit over 45% compared to UNI’s 16.93%. Nonetheless, SUSHI lags in year-to-date (YTD) gains, jumping more than 370% compared to UNI’s 474% gains.
Meanwhile, PancakeSwap’s CAKE has led the top DEX pack after delivering more than 3,330% YTD returns.
“SushiSwap is currently the 5th highest earning protocol,” Kay tweeted, hinting that the DEX has a likelihood of growing higher in the coming sessions.
“SushiSwap started out as a decentralized exchange, but it’s evolving to so much more,” he said.
“A suite of DeFi products, all generating revenue for the community treasury, and of course SUSHI holders.”
4/
Sushi Swap is currently the 5th highest earning protocol
While majority of fee-revenue goes to Sushi treasury, $SUSHI holders still control this. $SUSHI stakers also receive 0.05% of all fee-revenue. pic.twitter.com/cu4GMiVGU2
— Kris Kay | DeFi Donut (@thekriskay) September 14, 2021
Related: Altcoin Roundup: Time to rotate! Data suggests traders are shifting from NFTs to DeFi
On the technical charting front, SUSHI has fallen behind in the recent altcoin market boom. But the SushiSwap token’s climb in the recent sessions has had it break above $15, a key psychological resistance level, now acting as support.
SUSHI/USD daily price chart featuring its next upside price targets. Source: TradingView.com
THORChain has suffered a wave of attacks over the last few weeks, but RUNE is showing signs of recovery.
THORChain Makes Major Rally
THORChain is soaring.
The project’s RUNE token is up 39% in the last 24 hours, currently trading at $5.79. Although RUNE is still 72.1% off all-time highs, it’s a notable recovery given the recent wave of exploits THORChain has suffered.
THORChain is a cross-chain interoperability protocol for exchanging between tokens like BTC and ETH. RUNE is used as a medium of exchange on the platform. It was hit by an $8 million exploit last week when an attacker tricked the project into making a refund for assets that hadn’t been deposited. The attacker left a note in the transaction’s input data claiming that they could have taken more assets and urged the team to focus on improving its security. It read:
“Disable until audits are complete Audits are not a nice to have Do not rush code that controls 9 figures”
Only a week before that, the protocol’s ETH liquidity providers suffered losses of about $5 million in similar circumstances. The protocol was also hit by an incident in late June, though that time the losses amounted to only $140,000.
After the latest incident, THORChain confirmed that it would halt its network chain and conduct additional security audits. The team has been active on social media, yesterday confirming that it had hosted 20 white hat hackers for a THORChain “code walkthrough.”
The project has also received support from many prominent figures in the space, including ShapeShift’s Erik Voorhees and Delphi Digital’s Tom Shaughnessey.
Overwhelming support to enhance @THORChain
– @trailofbits audit
– @HalbornSecurity audit + 6 FT engineers
– @immunefi bug bounty program @ninerealms_cap ($500K program)
— Tom Shaughnessy 🦉 (@Shaughnessy119) July 28, 2021
RUNE dropped to a low of around $3.53 following last week’s attack. Though the network is still paused, the project’s native token seems to have made a solid recovery, rising 64%.
With RUNE trading at $5.79, THORChain’s market cap is currently $1.56 billion.
Disclosure: At the time of writing, the author of this feature owned ETH, ETH2X-FLI, and several other cryptocurrencies.
This news was brought to you by ANKR, our preferred DeFi Partner.
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The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
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$8M Lost as THORChain Suffers Third Attack in a Month
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Erik Voorhees Bets on Ethereum DEXs, THORChain
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Erik Voorhees, the founder and CEO of ShapeShift, has revealed in a podcast that he felt embarrassed and disgusted by the behavior of Bitcoin maximalists at the 2021 Bitcoin conference in Miami.
A Bitcoin OG who can see some merit in altcoins, Voorhees spoke on a panel during day two of the Miami conference in June. He caused a stir when he said “Did I hear someone on that prior panel say ‘If you’re against toxic maximalism, you’re against Bitcoin and you’re against freedom?’… Yeah, that’s some bullshit.”
The ShapeShift CEO expanded on those comments in a July 27 interview on the Unchained Podcast hosted by journalist Laura Shin. The 35-year-old slammed Bitcoiners who believe that toxic behavior such as trashing proponents of other cryptocurrencies is a good thing for BTC:
“They’ve spun themselves up into thinking that trashing these people is a virtue and it’s helping Bitcoin. Frankly, I think it’s just kind of disgusting and I was embarrassed.”
He added: “These people were on stage talking about the virtues of toxic maximalism. I don’t know when they got into Bitcoin, but absolutely that is not the community that I come from in Bitcoin.”
Vorhees has spoken out before against toxic maximalism, but told Shin that the Miami conference was the first Bitcoin conference he’s been to in which he was “embarrassed about the people who were there.”
He stated that if there is a genuine enemy to Bitcoin and toBitcoin maxis, it is “central banks, banking and fiat currency” and not the “Dogecoin community or Ethereum community.”
ShapeShift is a noncustodial crypto exchange operated out of Denver and headquartered in Switzerland. The platform announced a full integration with cross-chain DEX THORChain in April which enabled direct trading of Bitcoin, Ether, and Litecoin. However, THORChain has suffered two multi-million dollar breaches from hackers this month, along with a third more minor breach.
Related:ShapeShift to decentralize entire company, plans for largest airdrop in history
Cointelegraph reported on July 16 that Thorchain came to a halt after a hacker stole $7.6 million worth of crypto assets, and last week an apparent white hat hacker stole $8 million worth of ETH.
Voorhees conceded the exploits show that ThorChain still has a long way to go, but the fact that it can provide a DEX that is chain-agnostic is a “huge development for the industry.”
“THORChain is very new early software and they’ve had a few pretty atrocious bugs recently. Right now the chain is offline. So it’s not a panacea and it’s not ready for prime time, but it works. It works with real money and it’s out in the wild getting better and better each week.”
THORChain (RUNE) has suffered another heist in the space of one week. The hackers succeeded in stealing $8 million worth of crypto assets from the decentralized exchange and have suggested a 10 percent bounty, according to a Twitter thread on July 23, 2021.
THORChain Targeted Again
Barely seven days after THORChain, a cross-chain decentralized finance protocolsuffereda $7.6 million attack, the platform has been targeted again by hackers but this time, $8 million has been stolen from the decentralized exchange (DEX).
According to a Twitter thread by the THORChain team, the latest $8m hack on its ETH Router seems to have been orchestrated by a whitehat hacker, as the perpetrators deliberately limited the impact of the heist, while also advising the team to implement a 10 percent bounty.
THORChain has suffered a sophisticated attack on the ETH Router, around $8m. The hacker deliberately limited their impact, seemingly a whitehat.
ETH will be halted until it can be peer-reviewed with audit partners, as a priority.
LPs in the ERC-20 pools will be subsidised.
— THORChain (@THORChain) July 23, 2021
The hacker’s note in the transaction input data reads:
“Could have taken ETH, BTC, LYC, BNB, and BEP20s if waited. Wanted to each [a] lesson on minimizing damage. Multiple critical issues. A 10 percent VAR bounty would have prevented this. Disable [chain] until audits are complete. Audits are not nice to have. Do not rush code that controls 9 figures.”
More Work Needed
While the THORChain team has beenworkinground the clock to patch the bugs in the protocol since the first attack, the latest heist has indeed made it clear to the team that their hard work is not just enough.
Against that backdrop, the team has made it clear that it plans to implement the 10 percent bug bounty program requested by the hacker, and it will also halt support for ETH until it is extensively peer-reviewed.
“It is a tough time for the community and project, and the pain is real. The treasury has the funds to cover, but it’s time to slow down. THORChain is too important not to deliver on. The complexity of the state machine is its Achilles heel, but this can be solved with more eyes on, as well as a rethink in developer procedures and peer-review,” the team added.
While hacks and heists are seemingly inevitable in the world of decentralized finance (DeFi), a good number of projects have somehow managed to stay safe through juicy bug bounty programs and more.
THORChain faithful have encouraged the team to lookbeyondaudit and security firms in their efforts to solidify the network and find a way of attracting these anonymous and sophisticated hackers to work with THORChain.
At press time, the price of THORChain’s s RUNE token is down by 17 percent in the past 24 hours, trading around $3.89, according to CoinMarketCap.
THORChain has suffered an attack, leading to losses of around $8 million.
An attacker tricked the Bifröst protocol into accepting a fake deposit, then accepted a refund of the assets without adding any funds.
It’s the third major incident to hit THORChain in a month. A Bifröst exploit led to losses of $5 million only a week ago.
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THORChain says the attacker made off with around $8 million.
THORChain Hit by Another Exploit
Another THORChain vulnerability has been exposed.
THORChain has suffered a sophisticated attack on the ETH Router, around $8m. The hacker deliberately limited their impact, seemingly a whitehat.
ETH will be halted until it can be peer-reviewed with audit partners, as a priority.
LPs in the ERC-20 pools will be subsidised.
— THORChain (@THORChain) July 23, 2021
The team behind the project took to Twitter to announce that a hacker had carried out a “sophisticated attack” earlier this morning. The hacker used their own contract to trick THORChain’s Bifröst protocol into accepting a deposit of assets even though they hadn’t made any deposit. This essentially meant that they could receive a free refund without adding any funds to the protocol.
The hacker left a note suggesting that they could have taken more than $8 million, noting that they spotted “multiple critical issues.” A message in one of the transaction’s input data read:
“Could have taken ETH, BTC, LYC, BNB, and BEP20s if waited Wanted to teach lesson minimizing damage
Multiple critical issues
10% VAR bounty would have prevented this
Disable until audits are complete
Audits are not a nice to have
Do not rush code that controls 9 figures”
The total losses amount to around $8 million. THORChain said that the hacker was “seemingly a whitehat” because they made less impact than they could have done, and revealed that the hacker had requested a 10% bounty that would be awarded if they reach out. THORChain confirmed it would halt its network chain pending security audits and that liquidity providers would be reimbursed from its treasury. While the team thanked the THORChain community for its support, a note in the announcement read:
“It is a tough time for the community and project, and the pain is real.”
The impact of the incident has doubtless been compounded by THORChain’s recent run of other similar attacks. Last week, the protocol suffered losses of around $5 million when an attacker trickedBifröst into sending multiple 200 ETH transactions to their own address. In late June, THORChain was hit by another incident, though the losses came to a relatively minor $140,000.
THORChain is a cross-chain liquidity protocol for trading assets like BTC and ETH. It has its own token called RUNE for moving from one asset to another. The native token has also taken an 11.8% hit following the latest, currently trading at $4.14.
Disclosure: At the time of writing, the author of this feature owned ETH, ETH2X-FLI, and several other cryptocurrencies.
This news was brought to you by ANKR, our preferred DeFi Partner.
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The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.
$5M in Ethereum Lost in THORChain Exploit
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Cross-chain decentralized exchange THORChain has suffered its second multi-million-dollar hack in as many weeks, with $8 million worth of Ether impacted.
However, the attack appears to have been carried out by a white-hat hacker, with THORChain announcing the perpetrator had requested a 10% bounty. ETH will be halted until the code has been audited.
Liquidity providers impacted by the exploit will be subsidized using the project’s treasury funds
The whitehat requested a 10% bounty – which will be awarded if they reach out, and they should be encouraged to do so.
It is a tough time for the community and project, and the pain is real.
The treasury has the funds to cover, but it’s time to slow down.
— THORChain (@THORChain) July 23, 2021
The exchange — which is still in the middle of a staged beta launch called Chaosnet — conceded that the “complexity” of its state machine comprises THORChain’s “Archille’s heel,” however asserted that its issues “can be solved with more eyes on, as well as a re-think in developer procedures and peer-review.”
A screenshot shared from the project’s Discord forum appears to show a message forwarded to the project by the hack via transaction data.
The hacker claims they deliberately minimized the damage from the exploit in a bid to teach THORChain a lesson, stating: “Do not rush code that controls 9 figures,” and “Disable until audits are complete.”
The hacker adds that they could have stolen Ether, Bitcoin, Binance Coin, Lycancoin, and many BEP-20 tokens if they had wanted to, asserting that “multiple critical issues” were found and that a 10% bug bounty could have prevented the incident.
message from hacker… pic.twitter.com/1j8wOPcYHa
— zillaQuest!? (@zillaQuest) July 23, 2021
On July 16, Cointelegraph reported that THORChain had been halted after 4,000 Ether worth $7.6 million was drained from the protocol. The protocol unsuccessfully proposed a bug bounty to the hacker in exchange for returning the stolen funds.
Related:ChainSwap announces compensation and ‘deep audit’ plan after $8M exploit
The decentralized exchange also lost $140,000 in a separate exploit suffered last month.
THORChain entered into its guarded “Chaosnet” launch in April, enabling cross-chain swaps across the Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and Binance Chain networks.
THORChain has suffered an exploit on Chaosnet, resulting in losses of roughly $5 million for ETH liquidity providers.
The THORChain team said that an attacker tricked the network’s Bifröst protocol to send ETH to their own address.
The liquidity providers will be reimbursed from the project’s treasury.
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THORChain is the latest DeFi attack victim.
THORChain Pauses Network After Attack
THORChain has been exploited.
The DeFi network, which focuses on cross-chain interoperability between protocols like Bitcoin and Ethereum, announced that an attacker had discovered a vulnerability on its Chaosnet.
Initial estimates suggested that the assailant had taken 13,000 ETH worth $24.7 million, though THORChain’s has since taken to Twitter to say that the losses were closer to $5 million.
Aside from the liquidity providers who had locked ETH in the network, THORChain investors have also been hard hit: RUNE, the protocol’s native token, is down 14.9% at the time of writing, trading under $5 for the first time since March.
In a tweet storm, THORChain explained how the attacker had taken the funds. The team said that they “tricked” the project’s Bifröst protocol with a custom wrapper contract, then made multiple transfers of 0 ETH. However, they sent a transaction that said that the value was 200 ETH and used a contract to direct the value back to their own address. They used the attack path multiple times over, meaning they could take millions of dollars worth of ETH.
THORChain has since explained that the attack only affected ETH liquidity providers. As the attacker paid high slippage fees, THORChain said, nodes, arbitrageurs, and liquidity providers for ERC-20 tokens should profit from the attack.
THORChain paused the network last night and confirmed that it would donate funds to the ETH pool to restore those the liquidity providers lost. It also said it would work with security firms to conduct an audit.
In a Telegram post, the team noted that while it had enough funds in its treasury to cover the losses, it would offer a bounty to the attacker for the safe return of the funds.
Rounding off its breakdown of the attack, the team wrote:
“This is a disappointing moment for us all, but LPs and Nodes should be unaffected after all is recovered (the funds will be restored). The network will be stronger and more resilient.”
Several crypto community members have left messages of support for THORChain in the wake of the attack. “Innovation leads to exploitation,” said Andre Cronje, the creator of Yearn.Finance and many other DeFi protocols, before adding that exploits are more common in “new developing sectors.” Meanwhile, Solana’s Anatoly Yakovenko urged the team to “Stay strong!”
Innovation leads to exploitation. Its why hardened protocols often stop innovating, very little upside to increase risk by innovating. Its why we also see more exploits in new developing sectors.
— Andre Cronje (@AndreCronjeTech) July 16, 2021
THORChain’s Chaosnet was also targeted by attackers last month. That time, the losses came to around $140,000.
THORChain is best described as a decentralized liquidity protocol. It lets users exchange tokens for different Layer 1 blockchains, using the RUNE token to swap from one asset to another. The token model is designed so that RUNE becomes more valuable as the protocol attracts more liquidity.
THORChain has been active on social media throughout the night, though it’s likely a full post-mortem report will follow sometime after full details of the incident have been verified.
This news was brought to you by ANKR, our preferred DeFi Partner.
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The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.
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Bondly Finance Exploited for Millions in Potential Rug Pull
NFT project Bondly Finance was exploited today due to a token-minting attack from a still-unknown assailant. Attacker Mints 373 million BONDLY tokens Bondly Finance has suffered an attack. 🚨Attention Bondly…
Popular cross-chain decentralized exchange, ThorChain, has suffered a multimillion-dollar breach.
Estimates as to the scale of the damage vary, with ThorChain revising the initial estimate that 13,000 ETH (worth $25.1 million) had been stolen down to 4,000 ETH (roughly $7.6 million) as a ballpark for damages.
At this stage the estimate is around ~4000 ETH worth of assets (ETH/ERC20) was taken, not 13k ETH.
More detailed assessment and recovery steps will be announced soon.
The users who suffered (LPs) will be made whole in the coming weeks. https://t.co/LR2x8VZ2kx
— THORChain #ACTIVATETHESYNTHS⚡️ (@THORChain) July 15, 2021
In the ThorChain community Telegram channel, administrators have indicated the project has the funds needed to cover users’ stolen assets, but articulated a preference for the hacker to return the stolen funds in exchange for a bug bounty.
“While the treasury has the funds to cover the stolen amount, we request the attacker get in contact with the team to discuss return of funds and a bounty commensurate with the discovery,” a Telegram post stated, adding that user funds “will be available when the issue has been patched & the network resumes.”
ThorChain has since tweeted that its preliminary roadmap to recovery is underway, announcing that after the vulnerability is patched and the network restarted, Ether will be donated to liquidity provider pools to reimburse impacted users. From there, the team plans to engage security firms to have its contracts audited.
As of this writing, the ThorChain network remains halted.
This is a disappointing moment for all, but LPs and Nodes should be unaffected after all is recovered (the funds will be restored).
The network will be stronger and more resilient.
— THORChain #ACTIVATETHESYNTHS⚡️ (@THORChain) July 16, 2021
Blockchain cybersecurity firm, Halborn Security, is compiling a proposal to the ThorChain community for “Advance Persistent Protection,” offering up a team of up to half a dozen “ethical security engineers working to break every update on ThorChain.”
Related:A RUNE with a view: How smart crypto traders caught a 48% price pump
Thorchain entered into its guarded “Chaosnet” launch during April, facilitating cross-chain swaps across the Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and Binance Chain networks.
DeFi Watch founder Chris Blec said the staged “raise the caps” launch of ThorChain had prevented an even greater loss of funds.
Keep in mind – THORchain has been responsibly using a guarded launch approach to its rollout. This exploit could have been *much worse* if they had just recklessly launched without caps on its liquidity pools.
— Chris Blec (@ChrisBlec) July 15, 2021
Today’s attack is not the first time ThorChain has been targeted by hackers during its Chaosnet deployment, with the protocol losing at least $140,000 worth of assets last month.
ShapeShift has gone from a centralized exchange to adopting a full DEX aggregator model.
The platform has aggregated various Ethereum DEXs and cross-chain trading via THORChain.
Since launching its DEX offering in Jan. 2021, Voorhees says there has been a surge in activity on the platform.
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Switzerland-based crypto platform ShapeShift has come a long way since Erik Voorhees founded it in 2014. From its launch until late 2017, it became one of the most widely known centralized exchanges. In recent years, the platform has pivoted to focus on being a decentralized exchange (DEX) aggregator. In an exclusive interview with Crypto Briefing, Voorhees shed light on ShapeShift’s DEX strategy and the project’s forthcoming roadmap.
A New Era For ShapeShift
ShapeShift’s DeFi-focused plan of action took off in January 2021 with the launch of its Ethereum-based DEX aggregator.
Its new product allows users to trade ERC-20 assets and get the best prices across DEXs from a single interface. This puts it in competition with other leading aggregators such as 1inch and Matcha.
While ShapeShift itself is no longer a trading venue, it has integrated nearly all of the leading DEXs on its mobile and web platform.
Inside the web and mobile app service, users trade through decentralized exchanges like 0x, Balancer, Bancor, Curve, mStable, Uniswap, and others. The objective behind the move is to make trading non-custodial, and in line with the ethos of decentralization.
“We decided that we were going to have a new strategy and not try to provide an exchange service ourselves anymore,” Voorhees said. “Shapeshift has been around since 2014 as a centralized exchange, and that was not really competitive versus the DEXs.”
Voorhees also reflected on the issues with know-your-customer (KYC) procedures that adversely impacted ShapeShift in its early years. “On the new DEX offering you can add far more assets much faster, and there is obviously no KYC,” he explained. “It’s borderless and we could get out of the business of regulated activity.”
In 2018, owing to regulatory pressures, the exchange asked users to go through mandatory know your customer and anti-money laundering procedures, which caused a sharp drop in trading activity. Voorhees said that it worsened the user experience and cost the exchange 95% of its users.
“Back in 2018, when we added KYC to ShapeShift trading, it was really dismal,” he recalled. “This made the users’ experience bad because we were forcing them to give up their private information. By not providing the service of centralized trading anymore, we can remove the KYC restrictions.”
The revamped trading service does not require traders to complete any KYC procedure. Following the launch of ShapeShift’s DEX aggregator, the platform saw a surge in user activity.
Erik Voorhees is Bullish on THORChain
In addition to being an Ethereum DEX aggregator, ShapeShift offers the functionality of trading assets across different blockchains using THORChain.
THORChain is a cross-chain automated market maker (AMM) built on Cosmos SDK that allows users to trade Bitcoin natively with Ethereum and other ERC-20 tokens.
Using liquidity pools, Thorchain removes the need for any wrapping or centralized custodians.
ShapeShift was the first aggregator to integrate THORChain in April 2021. Voorhees said that he believes the protocol may be a game-changer, and not only for ShapeShift’s future goals.
“Some of the biggest trading pairs in cryptocurrency like BTC/USDT and BTC/ETH, are handled on either centralized exchanges or using wrapped tokens,” he said. “By using THORChain, the traders can remove centralized risk from such large volume trading pairs, and trade Bitcoin with other assets without giving up control over their assets.”
By routing orders through Thorchain, ShapeShift users can trade a native Bitcoin for a native Ethereum cross-chain, without wrapping assets or using any intermediaries.
Even though other projects bridge Ethereum and Bitcoin via wrapped tokens, Voorhees pointed to their security issues, arguing that wrapping Bitcoinwith a centralized custody mechanism exposes users to counterparty risk.
Shift between ETH <> BTC
– Non-custodial
– No intermediary
– No KYC
– No added fees
– No wrapped tokens
– No limits
ShapeShift is the only company that offers this on mobile today. Enjoy!#bitcoin #ethereum https://t.co/rwM8dxT7bs
— Erik Voorhees (@ErikVoorhees) June 17, 2021
The Advantages of Non-Custodial Services
Voorhees iterated that centralized exchanges pose risks that are at odds with the concept of immutability. Due to their custodial nature, centralized exchanges (CEXs) often put their customers at certain risks, the primary being the possibility of losing funds to a hack or theft.
According to him, while some of the biggest crypto exchanges are centralized today, the tide has been turning in favor of the many decentralized trading protocols. He said:
“We see that centralized platforms are no longer competitive versus decentralized exchanges. With DEXs and DeFi, you are trusting the open source protocol code. But you don’t have to trust any one of the business operations or jurisdictional risks of a company.”
With the Ethereum ecosystem’s ongoing DeFi boom, DEXs such as Uniswap process about $1 billion of volume daily today, more than Gemini and Kraken combined. Voorhees believes thatDeFi provides an alternative, which not only overcomes risk but also becomes a breeding ground for open source innovation.
This news was brought to you by ANKR, our preferred DeFi Partner.
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