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ARTICLE · 22 AUGUST 2022

DeFi Stablecoin Hacked; Research Finds Evidence Of Crypto Insider Trading

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According to reports, a Polkadot-based decentralized finance (DeFi) platform's native stable coin was depegged on Sunday after it dove 99 percent when hackers exploited a bug...

United StatesTechnology
Jordan R. Silversmith
Jordan R. Silversmith
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According to reports, a Polkadot-based decentralized finance (DeFi) platform's native stable coin was depegged on Sunday after it dove 99 percent when hackers exploited a bug in a new liquidity pool to mint almost 1.3 billion tokens, sinking the coin's value. A liquidity pool is a digital stack of cryptocurrency locked up in a smart contract, which creates liquidity for faster transactions on decentralized exchanges and DeFi protocols. In this case, the platform's developers believe the bug exploited by the hacker was caused by a misconfiguration of a new liquidity pool that recently went live. A wallet believed to belong to the attacker still contains approximately 1.27 billion of the stablecoin, but on-chain investigators have pointed out that the attacker who minted the fraudulent coins was not alone in taking advantage of the bug, with several other users stealing thousands of dollars of coins from the liquidity pool.

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