DeFi Project Thorchain Attacked, Draining $4.9 Million Worth Of Ethereum

Thorchain has suffered a second attack, draining millions in assets from the protocol. The attack was brought on by an unforeseen exploit in the ETH Bifrost allowing for an intuitive attack vector.

Initially it was thought that close to 13,000 Ethereum (ETH) had been stolen but according to an update posted by Runebase, it is now estimated at about 2,500 ETH. The update also stated that “the discrepancy may be due to additional loss from arbitrageurs taking advantage of the price manipulation”.

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.
Thorchain Telegram administrator

Other protocols like Rari have also been able to reimburse their proponents after being hacked.

Decentralised Community Protecting the Network

When trying to attack an open-source decentralised protocol, you’re not just attacking the developers but the community as well. Communities and node administrators have various incentives to protect the network, not just for the value they have pumped in, but the value they get out from time and effort spent building and securing the network.

RUNE down 14% after @THORChain suffered a ~4,000 ETH attack ($7.8 million.) The network’s reserve ($109 million) is making users whole.
Obviously better if it never happens, but in the long run network is now more secure and the transparency remains unparalleled.
— Zack Guzmán (@zGuz) July 16, 2021

The issue was discovered by a community developer and when anonymous nodes started voluntarily using the “make halt” command to stop their nodes, the emergency was made clear. Once more than a third of the nodes had been halted, the network itself was halted. This was a decentralised action taken by node operators to protect the network.

The bug in the code has been found by the team and a PR has already been opened to resolve the prob. If the community approves the change, the fix to @THORChain will be pushed out and trading resumed in ~24hrs I’m guessing. $RUNEhttps://t.co/g3AYszG8Gi
— Chad Barraford #BRINGTHECHAOS (@CBarraford) July 16, 2021

DeFi Targeted by Attackers

As DeFi is one of the more recent innovations in blockchain and distributed ledger technology (DLT), much of what is happening in the space is innovative. In spaces such as these, there will always be room for improvement and considerations not yet made, but as the space matures so will the knowledge and experience of risks.

So far this year, millions have been stolen in DeFi hacks, in various ways ranging from coding errors to rug pulls. Thorchain was in good stead after its price dropped only 14 percent following the attack. Other tokens like FinNexus (FNX) had dropped 90 percent after being hacked.

As the space matures many lessons will be learnt, but as these exploits occur developers are documenting and fixing them, strengthening protocols and best practices. In the long run, this will work to the advantage of the crypto industry as a whole.