Beanstalk cryptocurrency project robbed after hacker votes to send themselves $182 million
On Sunday, an attacker managed to drain around $182 million of cryptocurrency from Beanstalk Farms, a decentralized finance project aimed at balancing the supply and demand of different cryptocurrency assets. Notably, the attack exploited Beanstalk’s majority vote governance system, a core feature of many DeFi protocols.
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 . Flash loans are meant to provide liquidity or take advantage of price arbitrage opportunities but can also be used for more nefarious purposes.
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. With this supermajority stake, they were able to approve the execution of code that transferred the assets to their own wallet.
“DAO governance is currently trending in DeFi,” Pasfield said. “While it is a necessary step in the decentralization process, it should be done gradually and with all the possible risks carefully weighted. Developers and administrators should be aware of new points of failure that can be created by developers or DAO members intentionally or by accident.”
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