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CryptocurrencyDeFiNews

THORChain suffers $5 Million Loss in Recent DeFi Attack

Details of a multi-million dollar attack emerge that puts THORChain, the decentralized exchange, on the ever-growing list of exploited protocols.  THORChain estimates that it had lost roughly 4,000 ETH in a statement on July 16.

According to figures first released, the attack cost them about 13,000 ETH. But according to statements released on their Telegram channel, the actual loss was far less, approximately $4.9 million.  Although there are few details at the moment, THORChain has said that they will soon announce a more detailed result of their examination, as well as a recovery plan. 

The attack also affected the Multi-Chain ChaosNet as the team terminated the project once they discovered the hack. The MCCT became live in April, but three months later, it already has to face a critical challenge. Developers have assured consumers that the treasure is more than capable of covering the loss. They also asked the hackers to contact them to talk about a reward plan in exchange for the money. 

Fingers Point at Bifrost

A report on the incident places the blame on Bifrost, a DeFi protocol that links Polkadot and other proof of stake (POS) blockchains. According to the report, the latest ETH Bifrost upgrade allows contracts to wrap the router to increase composability. The attackers took advantage of this upgrade to manipulate and attack the THORChain router.

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They tricked ETH Bifrost using a custom wrapper which caused it to read zero dollar deposit as 200. THORChain continues to scramble to defend its position even amidst growing concerns among its token holder. 

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It usually takes months for a user to find out about an attack on a centralized exchange. They only realize much later when they start having issues with withdrawing their funds. However, the news of the attack on THORChain came out immediately. 

Erik Voorhees, the CEO of ShapeShift, was among those affected by the hack. He came out to lament his loss but still shared his optimism about the cross-chain DEX trading.

I lost several positions on RUNE today, but we are here for the long run. ChaosNet is incomplete without some chaos, and every pitfall we have to go through to achieve cross-chain decentralized trading with no intermediary is worth it.

THORChain also indicated that nodes and liquidity providers should not feel any impact once they recover and restore the stolen money. They ended by saying the attack will improve the strength and resilience of the network.  Today’s incident is the second time THORChain has suffered a hacking during its ChaosNet rollout, with the company losing roughly $140,000 in a June attack.

RUNE price falls (to no surprise)

As expected, RUNE, THORChain native token, fell by almost 20percent from an intraday high of $5.86 to about $4.75. THORChain token holders will feel the impact of this drop. However, for those yet to buy some RUNE, this is the best discount price they will receive. 

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Live price of RUNE from TradingView

CoinGecko market chart shows RUNE experiencing a 77.8percent drop from its all-time high of $20.87 in May.Is there hope of THORChain recovering anytime soon? Only time will tell. 


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Shelly Melancon (Switzerland)

Shelly is a cryptocurrency enthusiast from Switzerland, she bought her first crypto in 2015 when it was way less popular then it is today and since 2017 she has been writing about cryptocurrency for online news portals. Shelly is the newest addition to the Tokenhell team, she writes mostly news and reviews related articles , stay tuned to her posts to stay up to date with the crypto world.

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