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Binance Smart Chain-based DeFi platform suffers $3M flash loan attack

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Binance Smart Chain’s decentralized finance ecosystem saw a second flash loan exploit in a week after PancakeBunny. A new attack drained $3 million, or half the total liquidity, from DeFi platform Bogged Finance. The team confirmed the attack on Sunday, warning users not to buy its native token until the issue is solved.

The developer team identified and mitigated the exploit within 45 seconds, or 15 blocks, thanks to an online meeting held when the attack started. Still, the culprit was able to drain $3 million of the $6 million of liquidity. The BOG token price crashed from around $1.8 to $0.0003 following the attack.

Bogged Finance enables users to place a limit order on any Binance Smart Chain-based tokens. The team shared details of the attack in a Medium post:

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“The attacker was able to utilize flash loans to exploit a flaw in the staking section of the BOG smart contract to manipulate the staking rewards and cause an inflation of supply — without the transaction fee being charged and burned — causing net inflation.”

According to the team, the transaction limit of 47,500 BOG has slowed the attacker’s automated process and potentially mitigated the damage. Within 45 seconds before the lead developer patched the exploit by disabling the transaction fee, the hacker was able to make a total of 11 transactions and made off 11,358 Binance Coin (BNB).

The team is working on migrating the liquidity to a new contract by “using the same exploit the attacker used.” It will deploy an updated version of the contract to Binance Smart Chain.

After burning about 7.5 million previously minted tokens during the migration, Bogged Finance will airdrop the holders’ liquidity tokens. “If you paid for your BOG, the platform’s native token, it is safe,” the announcement reassures. The team expects a smaller circulating supply after the whole process, which will take 48 hours, according to yesterday’s announcement.

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Last week, prominent BSC-based DeFi protocol PancakeBunny suffered an attack in the same manner. Hackers made off with more than $200 million in crypto by utilizing an exploit in a flash loan attack.

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Crypto Newcomer Explodes After Abrupt Altcoin Listing on Binance

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A small-cap altcoin is shooting into the stratosphere after earning support from the global crypto exchange Binance.

The governance token Tranchess (CHESS) officially began trading today.

News of the coin’s listing triggered a 185% rise in the price of the asset – from $2.77 to $7.91. Its value has since settled to $5.09 at time of publishing.

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CHESS is listed in Binance’s Innovation Zone, a dedicated trading area where users can buy and sell newer tokens that are likely to have higher volatility and pose a higher risk to traders.

According to Binance Research,

“Tranchess is a yield-enhancing asset tracker with varied risk-return solutions on Binance Smart Chain (BSC), which consists of 3 tranche tokens (QUEEN, BISHOP, and ROOK) and its governance token CHESS. 

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The platform offers various features including a DEX (Tranchess Swap), money markets (Primary Market), staking, and network governance.”

Tranchess recently raised $1.5 million from Binance Labs, Three Arrows Capital, and other crypto venture firms.

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Binance proposes a real-time token burning mechanism to boost BNB value

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  • Binance has proposed the BEP-95 aimed to burn a percentage of transaction fees as a deflationary measure.
  • BEP-95 will occur alongside the quarterly token burn and well after the 100 million token supply is achieved.

Binance Smart Chain (BSC) is taking further steps to incorporate an additional deflationary mechanism to increase token valuation. As announced today, Binance (BNB) is introducing a new Binance Evolution Protocol (BEP) known as BEP-95. The BEP stands out from the network’s occasional token burns since it introduced a real-time burning mechanism.

According to Binance, a fixed portion of gas fees collected by validators in each block will be sent to the burn address. The ratio initially set at 10 percent, is adjustable according to changes proposed by the Binance community. BSC validators get to vote on community proposals, where voting power is based on staked BNB.

For a proposal to be reviewed by the validators, it has to receive a minimum deposit of 2,000 BNB (mainnet). All BNB is returned to holders after the finalization of the voting process. A proposal that wins is that which gathers 50 percent of the total voting power on the mainnet. Binance notes that voted-upon parameters are implemented immediately.

Details of Binance BEP-95 token burning mechanism

BEP-95 became relevant as it speeds up the BNB token burn, and makes the network increasingly decentralized. The BNB supply cap is about 168 million tokens and Binance intends to burn until 100 million tokens remain in circulation. This will take about 5-8 years to complete, according to Binance. The network’s most recent quarterly burn wiped out over 1 million tokens, worth about $639 million, from circulation.

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However, the latest update from its blog now says the BEP-95 burn “will continue functioning” even after the above target is attained. With the burn, Binance expects the intrinsic value of the BNB token to increase in tandem with demand. The network notes that validators and delegators may receive fewer tokens from staking, but the “fiat-denominated value of their rewards may increase.” Moreover, BNB has multiple use cases that benefit all holders of the token.

Currently, BEP-95 is in the draft stage and the network is yet to give a specific date for its implementation.

Several blockchains use the crypto-burning mechanism to create token scarcity and a subsequent increase in token value. Ethereum, for instance, uses the EIP-1559 for this purpose. 

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BNB price action

BNB, the fourth-largest cryptocurrency by market cap, was trading at $494 at press time, according to our data. The token has gained 0.8 percent in the day, and 4.8 percent week-over-week. Similar to other digital assets, BNB has rallied fueled by the Bitcoin-led gains. Crypto investor and YouTuber Lark Davis expects “good things” for the BNB price following its launch of a $1B growth fund.

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New proposal aims to raise Binance Coin value by burning BSC fees

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Amid the ongoing rally of Binance’s native token, Binance Coin (BNB), the developers of Binance Smart Chain (BSC) have proposed more measures to maintain the token’s deflationary model and improve its intrinsic value.

According to a new Binance Evolution Protocol, BEP-95, BSC developers are considering introducing a real-time burning mechanism for a portion of gas fees to reduce BNB supply and drive BNB value higher by increasing the demand. According to the BEP, BNB holders will decide how to dispatch the BSC gas reward.

Releasing the proposal on Friday, BSC developers noted that the new BEP might decrease the total amount of BNB that validators and delegators obtain from staking. The burning mechanism will be enabled by introducing governable parameters for two system smart contracts for collecting gas fees.

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Created by Binance in 2017, BNB is a deflationary token by design, meaning that Binance burns a percentage of the BNB supply every three months to maintain the token’s value. Binance will stop burning BNB once 50% of the initial supply has been burnt and only 100,000,000 BNB remain.

The latest BNB token burn took place last Monday, with Binance burning 1,335,888 BNB ($640 million) in its 17th quarterly burn.

The proposal comes amid BNB seeing a major rally recently, with the token breaking above $500 on Wednesday. At the time of writing, BNB is the third-largest cryptocurrency by market capitalization after Bitcoin (BTC) and Ether (ETH). The token is trading at $495, up around 44% over the past 30 days. BNB’s all-time high was recorded in May 2021, with the token surging to as high as $686, according to CoinGecko.

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The latest BIP, which occurred in August, is similar to a new transaction fee mechanism implemented for Ethereum’s London upgrade. According to Etherchain, the current average ETH burn rate amounts to 3.76 ETH or $15,448 per minute.

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