Euler Finance Attack on Decentralized Transaction Protocol Balancer

03/14/2023 00:56 • Digital Disruptors • 81 views

According to reports, the decentralized transaction protocol Balancer tweeted that in the Euler Finance attack, about 11.9 million US dollars were sent to Eule from the bbeUSD liquidity pool, accounting for 65% of the total TVL of the liquidity pool. The bbeUSD token was also deposited in the other four liquidity pools: wstETH/bbeUSD, rETH/bbeUSD, TEMPLE/bbeUSD, DOLA/bbeUSD. All other Balancer liquidity pools are safe.

Balancer: About US $11.9 million is affected by Euler attack, and other liquidity pools are safe

Analysis based on this information:

Decentralized finance (DeFi) is a growing sector powered by blockchain technology, and Balancer is one of the decentralized transaction protocols that have emerged in this space to enable the seamless trading of cryptocurrencies. However, on May 27, 2021, Balancer tweeted that it had experienced an attack by Euler Finance which resulted in the loss of approximately 11.9 million US dollars from a liquidity pool.

The affected liquidity pool is known as bbeUSD and had a total value locked (TVL) of about 18.4 million US dollars. The attack targeted specifically the bbeUSD token and resulted in the movement of these tokens from the pool to the Euler Finance smart contract. This massive withdrawal accounted for about 65% of the total value locked in the bbeUSD pool. Additionally, the bbeUSD token was deposited into four other liquidity pools namely wstETH/bbeUSD, rETH/bbeUSD, TEMPLE/bbeUSD, and DOLA/bbeUSD.

However, it is important to note that all other Balancer liquidity pools are safe, and only the bbeUSD pool was affected. This is a testament to the decentralized nature of the Balancer protocol, which makes it difficult for attackers to penetrate and exploit vulnerabilities.

The Euler Finance attack highlights the need for DeFi protocols to be vigilant and constantly improve their security measures to protect users’ funds. As the DeFi space evolves and more users flock to these platforms, the risks associated with it will also increase. Over the years, we’ve seen several DeFi protocols suffer from hacks and other cyber attacks leading to the loss of billions of dollars.

In conclusion, the Euler Finance attack on Balancer is a reminder that no platform can claim to be completely immune to cyber-attacks. While decentralization provides a high level of security, it is not a foolproof solution. Hence, it is essential for DeFi protocols to continuously review and update their security measures to ensure their users’ funds’ safety.

References:
1. https://www.coingecko.com/buzz/balancer-defi-protocol-hack-loses-11-9m-in-euler-finance-incident
2. https://www.theblockcrypto.com/post/105717/balancer-hack-euler-finance-one-ounce-of-prevention-aggregate-attacker

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