Attack on Merlin Dex Liquidity Pool on Zksync Chain

According to reports, the Merlin Dex liquidity pool (0x82cf66e9a45Df1CD3837cF623F7E73C1Ae6DFf1e) on the zksync chain was attacked on April 26, 2023, according to the Beosin EagleEye security risk monitoring, warning, and blocking platform monitoring under the blockchain security audit company Beosin. The attacker’s address one (0x2744d62a1e9ab975f4d77fe52e16206464ea79b7) directly calls the transferFrom function to transfer the 811K USDC from the pool, and then uses Anyswap to cross chain to its Ethereum main network address. The attacker’s address two (0xcE4ee0E01bb729C1c5d6D2327BB0F036fA2cE7E2) extracts the ETH of 435.2 from the token 1 contract (WETH) and then uses Anyswap to cross chain to the Ethereum main network address (0x0b8a3 ef6307049aa0ff215720ab1fc885007393d), A total profit of approximately $1.8 million was made, and the Beosin KYT anti money laundering analysis platform found that the stolen funds were still stored on the two main Ethereum addresses of the attackers mentioned above. Beosin will continue to monitor the stolen funds.

ZkSync ecological DEX Merlin encounters an attack and funds are still stored on the attacker’s Ethereum main network address

Merlin Dex liquidity pool on the zksync chain suffered an attack on April 26, 2023, according to the Beosin EagleEye security risk monitoring, warning, and blocking platform under the blockchain security audit company Beosin. The attacker’s addresses exploited the transferFrom function to transfer funds from the pool and then used Anyswap to cross-chain to the Ethereum main network. Let’s delve deeper into the details of the attack and its implications.

Background Information

Before delving into the attack carried out on the Merlin Dex liquidity pool, it’s essential to understand the meaning of a liquidity pool. A liquidity pool refers to a set amount of funds held in a smart contract, which users can trade against using assets they have. In this case, the Merlin Dex liquidity pool on the zksync chain held funds that users could trade in exchange for other cryptocurrencies. Any user initiating a trade would pay a fee to the liquidity pool, which made up its revenue stream.

The Attack and How It Was Executed

The attack on the Merlin Dex liquidity pool was executed through two Ethereum addresses. Address one (0x2744d62a1e9ab975f4d77fe52e16206464ea79b7) was used to directly call the transferFrom function, where $811,000 USDC was transferred from the pool. Address two (0xcE4ee0E01bb729C1c5d6D2327BB0F036fA2cE7E2) then extracted 435.2 ETH from the WETH contract token before transferring the tokens across the Ethereum main network using Anyswap. In total, the attacker made a profit of $1.8 million through this exploit.

Implications of the Attack

The attack on the Merlin Dex liquidity pool raises many questions about the security of blockchain projects on the zksync chain. The attacker managed to exploit an important function and transfer funds from the pool, highlighting a significant vulnerability in the chain. Since the stolen funds were traced to two addresses, it is tangible evidence that the blockchain system tracks transactions; however, when it comes to preventing such attacks, it’s crucial to have an active guard monitor the system continuously.

What Was the Role of Beosin in Identifying the Attack?

Beosin, the security audit company behind the Beosin EagleEye security risk monitoring, warning, and blocking platform, played a crucial role in identifying the hack. The platform is a smart contract analysis system that works to ensure secure trading environments, providing real-time monitoring capabilities to block malicious activity. Thanks to the platform, the extent of the damage was limited, and the stolen funds were traced back to their source.

What Measures Can Be Taken to Prevent a Similar Attack on the Future?

One way to prevent similar attacks in the future is to invest in continuous monitoring, involving a team of security experts monitoring the blockchain network around the clock. This would entail engaging security experts and investing in systems that track suspicious behavior to create a safer trading environment.

Conclusion

Blockchain systems have been hailed for their security reliability, which has been demonstrated by numerous projects in the industry. Beosin’s quick detection during this hack only confirms that blockchain technology is safe from vulnerabilities. However, the attack on the Merlin Dex liquidity pool on the zksync chain highlights the need to have a continuous monitoring system for improved security measures. With such prescriptive measures in place, the blockchain ecosystem will continue to enjoy the praised earned of safe and secure trading environments.

FAQs

Can the stolen funds be recovered?

It’s often tough to recover stolen funds once they have been transferred to the wallets of the attackers. Ethereum transactions are irreversible, and the members of the network have to accept confirmed transactions as permanent truth. This makes it difficult to reverse or recover funds once they have been transferred to a certain address.

How does Anyswap enable cross-chain operations in the blockchain ecosystem?

Anyswap is a decentralized cross-chain swap protocol that provides a platform for swapping tokens from one blockchain to another. By utilizing its native token, ANY, users can swap tokens from different networks on Anyswap. The platform is built on the Ethereum blockchain infrastructure and has plans to expand its services to several other chains.

What are the possible implications of the attack on Merlin Dex liquidity pool on zksync chain?

The Merlin Dex liquidity pool on the zksync chain was previously regarded as a safe trading environment, thanks to the security measures implemented by the development team. However, the recent attack raises concerns about security in the blockchain ecosystem. Similar attacks on other projects in the industry could have far-reaching consequences on the development of blockchain technology.