Beanstalk cryptocurrency project robbed after hacker votes to send themself $182 million - Aliens: AI Crypto News & Markets Updates












Beanstalk cryptocurrency project robbed after hacker votes to send themself $182 million

The Verge

Mon, Apr 18, 2022


Aliens TLDR

On Sunday, an attacker managed to drain around $182 million of cryptocurrency from Beanstalk Farms, a decentralized finance (DeFi) project aimed at balancing the supply and demand of different cryptocurrency assets.

Beanstalk admitted to the attack in a tweet shortly afterward , saying they were “investigating the attack and will make an announcement to the community as soon as possible.” Beanstalk describes itself as a “decentralized credit based stablecoin protocol,” and operates a system where participants earn rewards by contributing funds to a central funding pool (called “the silo”) that is used to balance the value of one token (known as a “bean”) at close to $1.

Like many other DeFi projects, the creators of Beanstalk — a development team called Publius — included a governance mechanism where participants could vote collectively on changes to the code.

The attack was made possible by another DeFi product called a “flash loan,” which allows users to borrow large amounts of cryptocurrency for very short periods of time (minutes or even seconds).

According to analysis from blockchain security firm CertiK, the Beanstalk attacker used a flash loan obtained through the decentralized protocol Aave to borrow close to $1 billion in cryptocurrency assets and exchanged these for enough beans to gain a 67 percent voting stake in the project.

“We are seeing an increasing trend in flash loan attacks this year,” said CertiK CEO and co-founder Ronghui Gu.

In the case of the Beanstalk hack, the Publius team admitted that they had not included any provision to mitigate the possibility of a flash loan attack, although presumably this was not apparent until the situation occurred.

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