$57 200 000 USD

APRIL 2021

GLOBAL

URANIUM FINANCE

DESCRIPTION OF EVENTS

Uranium Finance is "The daily dividends AMM". They "believe the answer is to simply return the majority of the profits to [their] users : make them shareholders instead of only liquidity providers."

 

"According to The Block’s research analyst Igor Igamberdiev, pair contracts in Uranium’s V2 version had contained the bug which enabled the exploit. They did this by allowing anyone to interact with the pair contracts, which are smart contracts for trading pairs in an AMM and withdraw all of the tokens." "The BSC Uniswap clone played around too much with their copied code and left a loophole open for someone to take the funds." "[T]he V 2.0 code was exploited by an attacker who transferred $50 million away from the LP funds into a swapping platform and specific wallets. The exploiter swapped for BTC, ETH, and DOT coin." "What allegedly happened is hackers taking over the migration of Uranium’s liquidity provider (LP) tokens." "The attackers exploited a bug in Uranium Finance’s smart contract to swap a single token for almost all other tokens in the protocol’s liquidity pool."

 

"This problem occurred on the pair contract of the Uranium project. The swap function part of the contract logic refers to the logic of PancakeSwap, allowing users to lend out funds through flash loans. However, when this function checks the contract balance according to the constant product formula, there is a problem of accuracy processing errors, resulting in the balance calculated in the final contract being 100 times larger than the actual balance of the contract. In this case, if the attacker uses a flash loan to borrow , Only need to return 1% of the loan amount to pass the inspection and steal the remaining 99% of the balance, resulting in project losses."

 

"The perpetrators have reportedly employed the services of Tornado Cash – an Ethereum privacy instrument – to move 2,400 ETH (worth nearly $6 million). Etherscan shows that all transactions were made in batches of 100 ETH." "The beneficiary of this incident is now sat on $57.2 million of liquid assets." "The hacker used PancakeSwap service to swap DOT and ADA to ETH. The attacker withdrew 2,438 ETH via Anyswap to Ethereum and 80 BTC after that. After, $1 Million USDT and $99k DAI (bought with USDT) then went to xDAI." "The funds stolen include 80 Bitcoin (BTC), 1,800 Ethereum (ETH), 26,500 Polkadot (DOT), 5.7 million Tether (USDT), 638,000 Cardano (ADA) and 112,000 U92, the native coin of Uranium Finance."

 

"This attack is the second for the Uranium project this April, the first being the exploit of hackers in the platform’s pools to steal around $1.3 million worth of BUSD and BNB." "On the 8th April around 00:30 UTC, an exploiter was able to constantly grab the contents of the RADS pool and all of the RADS/sRADS rewards and sell them for $1.3Mil worth of BUSD and BNB. This drastically dumped the price of RADS and the exploiter then transferred the BUSD and BNB to his wallet."

 

"The team additionally said that they are in contact with Binance Security Team and "in the process of escalating this," adding to those in possession of the funds or those who know someone who is, to contact them "to arrange a deal before this goes higher.""

 

"Uranium migration has been exploited, the following address has 50m in it The only thing that matters is keeping the funds on BSC, everyone please start tweeting this address to Binance immediately asking them to stop transfers."

 

"The general feeling is that this may not be the case of a hack; rather, this may be a soft rugpull event done by the team to jeopardize users’ funds. While the community carries this sentiment it is impossible to know who the malicious user was." "And of course, these millions of dollars were peoples' hard earned money. There are real consequences to this game if you're not careful."

The Uranium Finance smart contract upgraded their code base, modified in a way which added an exploit. Either this happened on purpose by one member of their team and wasn't noticed, or it happened by accident.

 

Given the history of having two hacks in the same month, and the nature of the code being modified to specifically add an exploit, it does seem more likely that one member of their team is involved. However, it is impossible to know for sure, and this is entirely speculation.

HOW COULD THIS HAVE BEEN PREVENTED?

Decentralized smart contracts are essentially hot wallets. They have no ability to think critically like a human being would. If you asked a human being to perform the same transaction as had happened in this exploit, your probability of success would be almost none. If you had to ask a few people and get approval from all of them, the probability would be effectively zero.

 

For this reason, having fund withdrawals controlled by a multi-signature wallet, with funds stored properly offline, is more secure than a smart contract. In addition, if smart contract are used, it's best to have only the necessary funds accessible at once, have some additional checks in place on larger withdrawals, and potentially set up a fund which can be used to cover any issues.

 

Check Our Framework For Safe Secure Exchange Platforms

Sources And Further Reading

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

Get Social

  • email
  • reddit
  • telegram
  • Twitter

© 2021 Quadriga Initiative. Your use of this site/service accepts the Terms of Use and Privacy Policy. This site is not associated with Ernst & Young, Miller Thompson, or the Official Committee of Affected Users. Hosted in Canada by HosterBox.