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DeFi Hack: BSC-Based Platform pNetwork Loses $12.7M in BTC

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  • pNetwork losses around $12.7 million in Bitcoin.
  • In case the funds were returned, hackers can take 11.5% of the stolen funds.
  • pNetwork team is still in discussion to reimburse affected users.

In the ever-growing crypto industry, we could spot many hacks going around. One of the recent hacks happened on pNetwork.

pNetwork, a cross-chain DeFi platform, the latest protocol which is targeted by an attacker on Binance Smart Chain (BSC). The attack reports a loss of around $12.7 million in BTC.

Moreover, the pNetwork team spotted that the attack happened by exploiting a bug in its codebase. In addition, the team adds that a fix is in progress already. pNetwork also announced that hackers can take 11.5% of the stolen funds, in case the funds were returned. In another tweet, pNetwork mentioned about the $1.5M bounty.

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pNetwork team is still in discussion to reimburse affected users. Aside from this, the platform also assures users that they will prioritise security over speed.

We have a proposed fix and we are now waiting for everyone to review it. We expect for the bridges to be back up in approximately 12 hours. We want to reassure everyone that we are prioritising security over speed.

According to CoinMarketCap data, the price of pNetwork (PNT) dropped nearly 14% in the last 24-hours. The PNT price is trading at $0.98 with a 24-hour trading volume of $16,066,717, at the time of writing.

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Furthermore, the exploit on the cross-chain platform is not the first time. Recently, the decentralized exchange THORChain suffered $8 million in a hack. In spite of all this, the hackers turned a white hat and promised to return funds for a 10% bounty. Added to this, Poly Network was involved in a $600 million hack in August.

DeFi

What is Decentralized Finance (DeFi)?

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Bitcoin (a payment system where anyone in the world can send money to anyone else) was just the beginning of the crypto revolution. People who develop decentralized applications (or dapps for short) seek to take accessibility one step further.

Decentralized Finance (or DeFi) was pointed out as a possible solution to lower the entry barrier for those who have difficulty gaining access to bank accounts.

More recently, DeFi are being used by cryptocurrency owners for other purposes: to make more money.

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What are DeFi?

As a whole, DeFi applications are financial products that operate on a public blockchain such as Ethereum.

These products are enabled, that is, they do not need third parties. Instead of financial intermediaries such as brokers and banks, everything is automated in the protocol through standalone contracts.

Do you want to take out a loan? You don’t need the bank to lend you the money. You can get a loan directly from your peers.

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Ready to bet on bitcoin futures and other derivatives? Give up finding a bettor. You can let the protocol do it all.

Want to convert one asset to another? Decentralized brokers (or DEXs) can facilitate a transaction without taking a large commission.

Who invented DeFi?

There isn’t a single creator of DeFi, but dapps appeared in Ethereum, invented by Vitalik Buterin. They have since expanded to other networks that use autonomous contracts to automate transactions, including Solana, Binance Smart Chain and Avalanche.

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Andreessen-Horowitz (a16z), the major venture capital firm, has led multi-million investment rounds in both the Compound and MakerDAO, protocols that are the cornerstones of the current DeFi system.

What is so special about DeFi?

DeFi have several fundamental features.

First, they are “open”, meaning you can use the applications when creating a wallet (usually without showing any identifying information such as name and address). This is theoretically (if not technologically) simpler than having a bank account.

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Second, you can move funds almost instantly via a blockchain, so you don’t have to wait for the bank transfer to take place.

Third, the fees (at least for now) are much better than in traditional banks, although transaction costs vary depending on the blockchain network.

Finally, dapps work together as “Legos of money”. This “composability” allows anyone to create, modify, mix and match, link or build on any existing DeFi product without permission.

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Unfortunately, this feature can be one of DeFi’s biggest weaknesses, as if a fundamental element, such as the stablecoin DAI, becomes vulnerable or becomes corrupted, the entire ecosystem built around the DAI can collapse.

What can be done with DeFi?

Borrowing and lending

If you have cryptocurrencies, you can lend them to a protocol, such as Aave and Compound, in exchange for interest and/or rewards. It is also possible to borrow cryptoactives from a protocol, which can be very useful if you want to make a trade.

But be careful! Most DeFi protocols use over-guarantees, where more money is allocated than the amount you want to borrow; if the asset’s value drops too low, the protocol can take its warrant to avoid losses.

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Many DeFi users use loans as a way to earn assets through “yield farming,” in which they lock funds in an asset pool to gain rewards.

Since rates vary depending on protocol and asset, experienced yield farmers move their assets and capitalize at the best rates.

Negotiation

At centralized brokers such as Coinbase and Binance, you are dependent on the broker to take custody of your assets on every trade. Decentralized brokers remove the middleman so that people can trade directly with each other.

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Also, DEXs such as Uniswap and PancakeSwap allow people to list new tokens for trading. Lack of verification increases risk, but it also allows people to “get early” on new assets before they hit the markets.

Derivatives

Sometimes you don’t need to be limited to trading specific currencies or tokens. Derivatives platforms like dYdX and Synthetix allow people to do more than spot trading.

For example, users can engage in leveraged trades, where they bet more than they have or create “synthetic assets” that mimic traditional stocks and commodities.

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How are dapps developed?

Anyone capable of writing standalone contract code is capable of creating dapps. There are several tools to test and/or implement standalone contracts, including Truffe and Ganache (on Ethereum).

After downloading the framework for creating autonomous contracts, you can create a token that allows a protocol to use the blockchain network. On Ethereum, the token default is ERC-20; at Solana, SLP; and in Binance Smart Chain, BEP20.

Having a token allows the protocol to interact directly with the currency of the first-tier blockchain. But projects also promote their tokens to drive decentralization.

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The Compound Loans protocol, for example, uses COMP as its governance token; those who have it make decisions about the protocol’s code and treasury allocations.

How to use DeFi products?

Anyone can use DeFi products by going to a dapp’s website and connecting with a crypto wallet, like MetaMask on Ethereum or Phantom on Solana. Most dapps do not ask users to provide personal information or register.

However, since dapps are built on a blockchain, you must use that blockchain’s currencies to pay for transactions. Ether (ETH) is required to pay transactions on the Ethereum network, just as SOL is required on the Solana blockchain.

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The future of DeFi

As of November 2020, less than $20 billion worth of locked-in value on various DeFi products, primarily on Ethereum. As early as November 2021, that number had risen to nearly $98 billion.

If the trend continues and the DeFi maximalists are right, this is just the beginning of a huge DeFi wave. True advocates argue that the advantages of an open and decentralized financial system are irresistible for not capturing trillions of dollars of value.

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DeFi

BadgerDAO: Hackers drain $10 million in latest DeFi breach

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  • BadgerDAO suffers $10 million hack
  • Traders were sent illicit permission notifications
  • BADGER loses 15% of its value

The decentralized finance industry of the crypto sector has now become one of the most sought-after industries. This is because it provides users with anonymity, and they can carry out their activities without the prying eyes of financial institutions. Furthermore, traders are open to making huge amounts of profits in the protocols in the sector by staking or farming. However, some illicit actors would rather exploit and steal from people instead of making their profits. In yet another hack case in the DeFi sector, hackers have exploited BadgerDAO, draining $10 million from the decentralized finance protocol.

Traders got illicit permission notifications

BadgerDAO is a protocol in the decentralized finance sector that allows traders access to various lending services and takes collateral in Bitcoin. According to the platform, upon calculating funds missing through the exploits, things are sitting around $10 million. In the reports that made the rounds today, users claimed that the hack was perpetrated through BadgerDAO’s interface and not its smart contracts like most hacks. Users claimed they were sent notifications about allowing new permissions while carrying out activities on the platform. With some users allowing the permissions, the hackers could cart away various amounts of digital assets going to a worth of $10 million.

BadgerDAO’s native token plummets

After the hack, the protocol developers said that users complained that they witnessed the unauthorized drawing of funds from their accounts. However, the protocol has moved into action swiftly, putting everything on the protocol on hold at the moment. The developers have also claimed that engineers are working tirelessly to fix the issue and ascertain the level of damage that the breach may have caused. However, BadgerDAO has refused to comment on the exact amount of missing funds on the platform and the level of damage that needs repair before operations can continue.

Some analysis websites have claimed that the amount exploited from the platform is $100 million. After the hack, the native token of the platform, BADGER, dipped in value, losing about 15% of its value, and is currently trading around $22. Hacks have now become predominant in the DeFi sector as the year draws to a close. Some days ago, MonoX, another DeFi protocol, got hacked with the illicit actors carting away more than $30 million in different digital assets.

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Someone Just Lost $50 Million Worth of Bitcoin to DeFi Hacker

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A single user of the Badger DAO protocol has lost a whopping $50 million worth of Bitcoin to a hacker

Badger DAO, a Bitcoin-focused decentralized finance project built on the Ethereum blockchain, has been drained of roughly $100 million as a result of a nasty front-end attack.

A single user has lost 896 BTC (roughly $50 million), according to blockchain security company PeckShield.

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In a Twitter statement, the team has acknowledged reports of unauthorized withdrawals, adding that its engineers are investigating the issue.

The protocol’s smart contracts have been temporarily halted.

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According to data provided by DeFi Pulse, Badger DAO is the 23rd biggest DeFi protocol on Ethereum. Last month, it topped $1 billion in total value locked.

Badger DAO allows users to earn passive income with Bitcoin by converting it to either Wrapped Bitcoin (WBTC) or renBTC and depositing it into Sett vaults that algorithmically allocate and autocompound users’ yields.

The hack happened just days before the yield vault protocol’s one-year anniversary.

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BADGER, the native token of the Badger DAO project, is down 15.3% on the news, according to CoinGecko data. 

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