Decentralized finance (DeFi) protocol DEUS has lost more than $6 million due to a security breach in its DEI stablecoin. The hacker exploited a vulnerability in BNB Chain (BNB) on May 5, the blockchain security firm let it be known; PeckShield.
A bot initiated the attack on the BNB Chain, resulting in a loss of over $1.3 million. The hacker also attacked the Arbitrum network, with ARB/ETH deployments losing more than $5 million. Twitter users they affirmed that the token contract had a basic implementation error as its root cause.
hi @DeusDao: it appears to be a pubic burn vulnerability with loss > $1.3M alone at BSC. The ARB/ETH deployments are also affected.
The BSC hack was successfully frontrun by a bot: https://t.co/hXskQOIfwV
The DEI token @ BSC was upgraded on Apr-10-2023 https://t.co/QJHwnZaXMk pic.twitter.com/C51CnVsg1B
— PeckShield Inc. (@peckshield) May 5, 2023
The protocol confirmed the attack, paused all contracts and burned DEI tokens to prevent further damage. “We are currently in the process of understanding the actual backing of DEI tokens,” the DEUS team said on Twitter, adding that a “comprehensive recovery and redemption plan” will be created after a full analysis of balances and snapshots.
DEI is used as a guarantee mechanism for third-party instruments built using the Fantom protocol. Its price has fallen 30% in the last 24 hours, according to data from CoinMarketCap. At press time, the stablecoin is trading at $0.20, having lost its $0.30 peg. Last year, the stablecoin also lost its peg to the US dollar following the collapse of Terraform Labs.
It is not the first time that DEUS Finance has been hacked. The protocol was breached in a March 2022 flash lending attack, resulting in losses of over $3 million in Dai (DAI) and Ether (ETH). At the time, Peckshield revealed that the hackers funneled the stolen funds using the Tornado cash coin mixing tool.
DEUS Finance is a decentralized marketplace that allows trading digital and physical assets, such as commodities, on the Ethereum blockchain.
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