Zabu Finance, a decentralized yield cultivation protocol at Avalanche, suffered the first major chain-related attack. The protocol was the victim of an exploit that allowed an attacker to steal $ 3.2 million in tokens, according to reports. The core of the exploit occurred due to a vulnerability in Spore’s token design, which allowed for the minting of 4.5 billion zabu that were successfully withdrawn from the platform, bringing the value of the coin to 0.
Zabu Finance suffers the first major avalanche attack
Zabu Finance, a decentralized performance farm protocol built on the Avax blockchain, faced the first big hack related to the Avalanche chain last week. An attacker took advantage of a vulnerability and withdrew $ 3.2 million in various cryptocurrencies. The attack had its roots in a group of a token called Spore, which allowed the attacker to mint more than 4.5 billion of the protocol’s native token (Zabu).
The tokens were then dumped into other defi trading protocols that take advantage of Avalanche, such as Pangolin and Trader Joe. The exchange quickly opened withdrawals to allow users to take their funds from the platform to minimize the risk of these assets. This sell-off drives the price of zabu to zero, causing investors to lose a large amount of funds in token form.
However, the protocol quickly came up with a plan to reimburse users for their losses.
Zabu presented a recovery and repayment program that plans to return funds to those most affected. The protocol is already rebuilding its cultivation protocols and plans to launch NFT which represents the debt of each protocol. He stated:
Affected Stakers will get airdrop NFTs, which are the representation of offset rights and we use the proceeds from the protocol to buy them back later. Protocol revenue includes NFT sales, Autofarm fees, Launchpad fees.
Zabu announced that all proceeds from his upcoming NFT project, called Zabu The Tiger, will be used to compensate pre-hack holders.
According to data provided Per CoinGecko, the zabu token is now trading at $ 0.00009276, dropping from the $ 0.004 price the token had before the hack. The team informed users that after the hack they implemented an ongoing audit to avoid facing such problems again.
What do you think of the first big hack of one of Avalanche’s defi protocols? Let us know in the comment section below.
Image credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not an offer or direct solicitation of an offer to buy or sell, nor is it a recommendation or endorsement of any product, service or company. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author are responsible, directly or indirectly, for any damage or loss caused or allegedly caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.