A hacker manipulated the swap mechanics of a liquidity pool on the cross-chain stablecoin bridge Allbridge Core, looting $1.66 million price of digital belongings over the weekend.
In a autopsy of the incident, Allbridge notes the hacker used a flash mortgage and exploited the swap logic of its Solana (SOL) liquidity swimming pools.
The attacker borrowed roughly $1.12 million price of the dollar-pegged stablecoin USDC from a lending protocol, then swapped that USDC into rival stablecoin USDT.
The hacker then performed a sequence of 5 “same-asset swaps,” exchanging 100,000 USDT for progressively much less of the identical stablecoin.
Allbridge notes the swap path handled an enter and output of the identical token like some other pair.
“As a result of each side of a same-asset swap reference the identical pool, the accounting of the 2 halves diverged, and every iteration pushed the pool’s inside pricing additional out of line with actuality.”
After closely skewing the value of Tether’s stablecoin within the liquidity pool, the hacker managed to swap solely 4,000 USDT for two.24 million USDC. The attacker then repaid the flash mortgage and saved the excess 1,118,239 USDC and 538,692 USDT, totalling roughly $1.66 million price of stolen crypto.
Allbridge notes the liquidity pool’s imbalance safeguard was “configured permissively,” enabling mispricing to balloon to worthwhile ranges earlier than it triggered.
The stablecoin bridge has since resumed routes that don’t depend on liquidity swimming pools however introduced it plans to cease conducting pool-based swaps. The undertaking additionally says it has traced $1.63 million of the stolen funds, which have been bridged from Solana to a single Ethereum (ETH) consolidation deal with after which moved in a number of totally different instructions.
Allbridge additionally notes that no person wallets, personal keys or non-pool bridge routes have been impacted by the exploit.
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