Evening
So last year crypto world lost $1.3 billion worth asset in protocol exploits/hacks, and it seems 2022 is not going to be any different. Recently, cross chain defi protocol Qubit Finance Aka X-Bridge suffered a protocol exploit and as a result lost $80 million worth funds.
Qubit Finance allows users to deposit their tokens on the protocol and borrow tokens on other chains against the deposited collateral. Simply speaking, one can deposit collateral to the protocol and borrow their desired tokens on other chain using Bridge.
As per blockchain security firm Certik, the hacker was able to withdraw tokens on Binance Smart Chain without making any deposit. The hacker tricked the protocol into thinking that deposit was made without making an actual deposit. The hacker minted 77,162 qwETh(wrapped Ethereum bridged via Qubit) worth $175 million and later used it as collateral to drain the protocol's lending pool for $80 million worth BNB.
The is by far the seventh largest defi protocol exploit in crypto history and the biggest one in current year. Qubit's native token took a hit after the incident was reported and plummeted by 25% in price over last 24 hrs. Several functions of QBridge have been disabled pending the vulnerability is fixed.
Qubit have contacted the exploiter and offered a maximum bounty reward in return of stolen funds. Qubit team also offered hackers further negotiations in case if bounty rewards are not enough.
Defi protocols hacks/exploits have been becoming more frequent lately as the defi world exploded attracting huge investrments. This hacks/exploits serve as a reminder that defi space comes with its own risks and due diligence on user's part is required before investing, as vulnerability audits by security firms continue to prove futile again and again.
