On June 8, at 05:57 Kyiv time, the Osmosis blockchain network was stopped. Key developers were forced to resort to such a last resort after the discovery of an exploit that could lead to the leakage of about $ 5 million from liquidity pools.
The error was discovered by a member of the community and shared information about it in the Osmosis thread on Reddit. This post was later removed by moderators. The user has invested in the liquidity pool and then immediately withdraws it. At the same time, the withdrawal amount turned out to be 50% more than the deposit amount. The development team shut down the network 12 minutes after the bug was disclosed.
The exploit was very simply executed :-
1. Add liquidity to a pool
2. Remove liquidity from the pool allowing 50% extra. No bonding needed.
3. Rinse and repeatpic.twitter.com/FHgNgA3ntK— Junonaut (@TheJunonaut) June 8, 2022
The Osmosis team later wrote on microblogging service Twitter that the liquidity pools were not “completely depleted.” The developers promptly began to correct the error, assess the amount of losses and work to restore the network’s performance. According to preliminary estimates, the amount of losses is estimated at about $5 million. Developers will share more details later.
Liquidity pools were NOT “completely drained”.
Devs are fixing the bug, scoping the size of losses (likely in the range of ~$5M), and working on recovery.
More info to come.https://t.co/WOu7MMgSUM
— Osmosis ? (@osmosiszone) June 8, 2022
Osmosis is a blockchain built on the Cosmos platform. It operates a decentralized exchange that had a daily trading volume of $11.8 million before the network shutdown. Over the past 24 hours, the value of the Osmosis token (OSMO) has fallen by 6.96%.
Source: coindesk
