Yet another DeFi hack this week.
Matthew Liu, the co-founder of Origin Protocol, confirmed an attack on the Origin Dollar (OUSD) vault.
“OUSD has been hacked, and there has been a loss of user funds. We are actively investigating the issue. We are committed to making things right,” wrote Liu in the official Medium post.
The team is now asking exchanges to blacklist any transactions from the wallets identified as belonging to the attacker.
“The attack was a reentrancy bug in our contract.
Unfortunately, our contract was safe from reentrancy bugs unless one of our supported stablecoins was attacking us.”
He explained that the attack originated from a contract deployed at Nov-17–2020 at 12:40:56 AM +UTC, which involved a flash loan of 70,000 ETH borrowed from dYdX. It further involves the stablecoin swaps, the minting of 7,500,000 OUSD as intended.
“At this point, the attacker held a little over half of all OUSD in existence”
The attacker basically exploited a missing validation check in mint multiple, minting OUSD with multiple stablecoins, to pass in a fake “stablecoin” under their control, which then called “transferFrom” on by the vault, allowing the hacker to exploit the contract with a reentrancy attack in the middle of the mint.
The attacker was able to create a rebase event inside the second mint after funds had moved to OUSD from the first mint but before the supply of OUSD increased. This created a massive rebase for everyone in the contract, including the attacker. As such, the attacker received their first large OUSD mint, more OUSD than the contract had assets.
The Origin Protocol team continues to recover the funds and asked the users to stop providing liquidity on SushiSwap, remove their funds, and not indulge in buying or selling OUSD.
The team has also asked the hacker to do the right thing by returning the funds, now that they have “demonstrated your superior skills as a hacker, and we’d happily hire you as a security consultant.”
As a result, the stablecoin pegged to $1.00 has dropped over 85% in value to $0.15.
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