$2 402 000 USD

JULY 2021

GLOBAL

PANCAKEBUNNY

DESCRIPTION OF EVENTS

PancakeBunny is a "DeFi revenue aggregator". Their "Bunny team is dedicated to support the underlying DeFi ecosystem by providing users with an easy way to automatically compound their yields through the Binance Smart Chain. The DeFi movement, and more specifically Yield Aggregators, have seen a huge surge in activity in 2020. The Rise of Yearn, which uses existing protocols such as Compound, DyDx, and Curve, has influenced the development of various other Yield Aggregator projects on the Ethereum Network. [Their] goal is to expand that same interest through the Binance Smart Chain Ecosystem."

 

"Bunny, like other yield aggregators on BSC, uses Pancake Swap since it is the most prominent platform for Yield Farming. Bunny is continuously striving to create innovative new Yield Optimization Strategies. Currently [they] have BUNNY, CAKE, BUNNY-BNB, CAKE-BNB BUSD-BNB, USDT-BNB, DAI-BNB, USDC-BNB, VAI-BUSD, USDT-BUSD Pools. Furthermore, on [their] website, you can see we have the maximizer vaults. These strategies allow users to get the profits from certain pools and these profits are automatically auto compounded into the CAKE compounding pool, giving users a much greater return, while protecting the principal. We are currently launching our cross chain project, which will allow ETH-BSC cross chain, bringing more ETH users on bsc yield farming as well."

 

"As many of you are aware, there was an economic exploit of polyBUNNY outside the polygon.pancakebunny.finance platform, resulting in the minting of 2.1M polyBUNNY and a drop in the price of polyBUNNY to just over $2 at Jul-16–2021 07:17:11 PM +UTC." PancakeBunny "tweeted that its version on Polygon was attacked by outsiders and has suspended all Polygon Sushi Vaults. According to officials, Polygon vaults, BSC PancakeBunny vaults, and BUNNY are currently safe. Details will be announced later. The attacker made a profit of 1281 WETH." "2.1 million PolyBunny (polyBUNNY) tokens have been minted, leading to an 82% worth plunge from $10 previous to the exploit, to simply over $2 submit the preliminary harm."

 

"Two months ago PancakeBunny got rekt on BSC, now the same thing has happened on Polygon. $2.4 million lost. How earitating."

 

"The attacker made a small deposit in one of [the] Bunny Vaults and at the same time, made a deposit of large value directly to MiniChefV2 (SushiSwap) and then called the function “withdrawAll” to execute the attack with the amount deposited in the MiniChefV2 as interest."

 

"Chronologically, the attacker made a small deposit ( roughly $19,203) in one of many Bunny Vaults, whereas on the similar time, made a large deposit (roughly $47,990,975) on to SushiSwap, and by calling the “withdrawAll” operate executed the assault with the quantity deposited to SushiSwap as curiosity. By efficiently manipulating the oracle to extend the curiosity, the inflated efficiency charge resulted in minting roughly 2.1 million PolyBunny tokens to the attacker, who at that time repaid Aave’s flash mortgage and exited the assault with about 1,281 Ethereum, in line with the official post mortem."

 

"The attacker followed the following steps to exploit the polyBUNNY minter: (1) Deposit 0.000000009416941138 SLP (~19,203 USD) into the polygon.pancakebunny USDT-USDC Vault. (2) Deposit 0.000023532935903931 SLP (~47,990,975 USD) to the USDT-USDC MiniChefV2 contract on SushiSwap. (3) This generated a performance fee of 0.000007006743943544 SLP (~14,284,950 USD) and minted 2.1 million polyBUNNY to the attacker. (4) Dump polyBUNNY for WETH. (5) Repay AAVE’s flashloan and exit the attack, gaining 1,281.702952074137533313 ETH."

 

"They say there’s a plan to compensate their users, so it seems they’re not ready to give up yet." "Everyone who held polyBUNNY at the time of the exploit, including polyBUNNY-ETH and polyBUNNY-QUICK, is eligible to participate in the Compensation program. This means that the Team will verify all of the wallet addresses that held polyBUNNy (whether in token form or as part of an LP pair) during the exploited block." "Everyone who held polyBUNNY at the time of the exploit will receive MND tokens from the Team’s share of MND." "Team Bunny will distribute a total of $2.4M in MND tokens as total compensation to polyBUNNY holders. This amount corresponds to the amount that was exploited by the attacker. The number of MND tokens you will receive depends on the price of MND. Suppose the final value (i.e. the total value of assets committed to the Vault by 26 July) in the Mound (MND) Vault is $50M and 1M MND is minted. Then each MND would be worth $50, and all of the polyBUNNY holders would receive 2.4M/50 = 48,000 MND in total. And you would get a number proportional to the size of your bag of polyBUNNY vs. the total number of polyBUNNY prior to the exploit."

 

"Following the exploit, the staff introduced it has “revised its protocols to maximise safety for the launch of latest merchandise,” whereas publishing particulars on the Qubit lending protocol launch course of and the Mound (MND) Vault replace." "All vaults on Polygon.PancakeBunny have been rendered safe. The vulnerability that allowed for this mishap has been addressed and the Sushi Vaults, where the issue occurred, has been reopened."

 

"As ever, Bunny Fam, we remain profoundly grateful for your trust and support. We deeply regret this incident, and will do our best to restore the upward trajectory of polyBUNNY."

PancakeBunny is a staking platform for crypto-assets. Hackers used the smart contract along with flash loans to manipulate prices, and made $2.4m in profit.

 

The project has made an effort to reimburse investors and continues to operate.

HOW COULD THIS HAVE BEEN PREVENTED?

While decentralized finance is made progressively more secure after learning from each attack, the most secure way of storing cryptoassets continues to be offline multi-signature wallets with keys held by reputable people.

 

Check Our Framework For Safe Secure Exchange Platforms

Sources And Further Reading

 For questions or enquiries, email info@quadrigainitiative.com.

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