- Woofi offered a bounty after a $8.75M exploit.
- WOOFi offered a 10% white hat reward.
The Arbitrum network swap offering on the decentralized finance platform WOOFi was the target of an exploit that caused a loss of roughly $8.75 million in cryptocurrency.
On Tuesday, an unidentified attacker used a series of flash loans to manipulate the platform’s Synthetic Proactive Market Making (sPMM) algorithm. By taking advantage of the low liquidity, the attacker significantly impacted the price of the WOO token.
The company reported in a post-mortem report that the attacker had taken around 7.7 million WOO tokens and other assets, which they then sold on WOOFi. As a result, the project’s native token, WOO, was valued at almost zero by the sPMM algorithm.
Earlier today we identified an exploit of WOOFi Swap on Arbitrum. Within 13 minutes, the threat had been contained and we marked all other WOO contracts as safe. Linked below is a post-mortem detailing today’s events. (1/6)https://t.co/igDaOMgyCP
— WOOFi (@_WOOFi) March 5, 2024
The exploiter then took advantage of this unusual price to exchange 10 million WOO. By doing this three times in a short amount of time, they were able to make significant gains.
WOOFi’s transaction monitoring system and other crypto security teams quickly noticed the irregularity, which prompted the suspension of WOOFi Swap’s smart contracts in order to stop additional losses and start an inquiry.
Woofi stated, “We will work with top security firms to ensure these vulnerabilities are identified at an earlier stage. This is the first time an incident like this has happened to us, and we want to make sure it doesn’t happen again.”
To provide consumers with the best rate, WOOFi’s sPMM algorithm mimics the dynamics of centralized exchanges. However, the company claims that this exploit was made possible by an unforeseen mistake in the algorithm’s interaction with WOO’s liquidity requirements on Arbitrum.
WOOFi responded to the event by offering the attacker a 10% white hat reward for the restitution of the money that was stolen. The group emphasized that before redeploying the WOOFi Swap contracts, it will fix the vulnerabilities.
Last month, the $2 billion daily trading volume on the WOO X market was a record. WOOFi saw almost $300 million worth of transactions, totaling $1.74 billion in volume. For three days in a row, WOOFi claimed revenue that broke records.
In the Arbitrum ecosystem, WOOFi comes in fourth place for the number of active dApp users during the previous seven days. Concurrently, the user base from ecosystems like as zkSync, Linea, and Optimism is growing at an accelerated rate, indicating a sustained rise in the WOO ecosystem.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
