Defi ‘Exactly Protocol’ Hack Evaluation

Introduction

On Aug 18, DeFi @ExactlyProtocol, working on Optimism, encountered a breach leading to a lack of round $7.3M. A loophole within the DebtManager contract allowed hackers to tweak the market deal with and evade integral allow checks, resulting in the theft of customers’ $USDC.

Abstract of the Exploit

Attackers made use of an insufficient_check vulnerability in Precisely Protocol’s DebtManager contract. By injecting a fraudulent market deal with, they efficiently skirted the protocol’s allow checks. This opened a door to activate a malicious deposit perform, resulting in the theft of customers’ $USDC. Subsequently, they liquidated customers’ property for illicit positive aspects.

Technical Breakdown

Vulnerability

The first difficulty was within the DebtManager contract of the Precisely Protocol. It lacked rigorous validation for the market deal with enter.

Assault Methodology

The attacker:

  • Manipulated the vulnerability within the `DebtManager` contract
  • Inserted a counterfeit market contract deal with, evading the `allow` checks
  • Leveraged this unauthorized entry to provoke a dangerous deposit perform, culminating within the theft of customers’ $USDC
  • Cashed out consumer property to make illicit income

Reentrancy

Demonstrating profound experience, the attacker not solely bypassed the allow examine within the DebtManager contract but in addition tampered with the _msgSender to impersonate a sufferer. Utilizing an untrusted exterior name, they accessed the crossDeleverage perform once more, stripping collaterals from the _msgSender.

Fast Response and Investigation

Upon noticing the breach, Precisely Protocol acted swiftly. They acknowledged the incident and began an investigation. Operations had been momentarily halted, however provisions had been made to facilitate consumer asset withdrawals.

The protocol is now totally operational, and notably, no liquidations befell. Efforts are ongoing to recuperate the stolen funds, together with establishing communication with the culprits.

Contextualizing the Assault

Market Dynamics

This breach occurred throughout a wider cryptocurrency market downturn. Established cash, specifically XRP, Litecoin (LTC), and Bitcoin Money (BCH), skilled important drops. Bitcoin briefly dipped to $25,200 earlier than rallying.

DeFi Sector Vulnerabilities

The Precisely Protocol incident isn’t an remoted case within the DeFi world. Safety lapses, particularly surrounding applied sciences like cross-chain bridges, have emerged. Hundred Finance on the Optimism community additionally confronted a hack earlier, leading to a lack of $7 million in crypto property.

Assault and Comply with-Up Actions

For these excited about a deeper dive, the blockchain transactions tied to the exploit are:

  1. https://optimistic.etherscan.io/tx/0x3d6367de5c191204b44b8a5cf975f257472087a9aadc59b5d744ffdef33a520e
  2. https://optimistic.etherscan.io/tx/0x1526acfb7062090bd5fed1b3821d1691c87f6c4fb294f56b5b921f0edf0cfad6
  3. https://optimistic.etherscan.io/tx/0xe8999fb57684856d637504f1f0082b69a3f7b34dd4e7597bea376c9466813585

Moreover, the attacker initially secured funds from TornadoCash and bridged them to deal with 0xe4f3 on Optimism by way of the Optimism Bridge. The exploit contract was then launched by 0xe4f3, with addresses 0x3747 and 0x4171 executing the assault. Earnings had been transformed to roughly 4324 Ether.

As of now, 1500 Ether has transitioned again to Ethereum by way of the Throughout Bridge. In the meantime, 2833 Ether is en route again to Ethereum via the Optimism Bridge, although the transaction is within the Problem Interval. Surveillance continues on the attacker’s deal with.

Addresses Related to the Exploit

  1. https://optimistic.etherscan.io/deal with/0x3747dbbcb5c07786a4c59883e473a2e38f571af9
  2. https://optimistic.etherscan.io/deal with/0xe4f34a72d7c18b6f666d6ca53fbc3790bc9da042
  3. https://optimistic.etherscan.io/deal with/0x417179df13ba3ed138b0a58eaa0c3813430a20e0

Conclusion

The DeFi enviornment, bursting with potential, additionally carries inherent dangers. Rigorous contract audits, multi-layered safety measures, and consumer schooling are paramount. Because the DeFi world evolves, safety should concurrently advance to safeguard a resilient ecosystem. Stakeholders are urged to stay cautious and knowledgeable.

An ineffective smart contract audit by unskilled auditors typically outcome into expensive exploits. At ImmuneBytes, we imagine in treating each vulnerability (minor or crucial) with utmost consideration and our crew of exceptionally adept and skilled auditors ensures that no shortcomings can escape their piercing eyes.


Writer: ImmuneBytes
Date: 2023-08-21 08:49:11

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Alina A, Toronto
Alina A, Torontohttp://alinaa-cybersecurity.com
Alina A, an UofT graduate & Google Certified Cyber Security analyst, currently based in Toronto, Canada. She is passionate for Research and to write about Cyber-security related issues, trends and concerns in an emerging digital world.

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