Apr 2022 - DeusDao Muon Price Manipulation Hack - $Unknown (Global)
"Muon is checking for SWAPS inside of solidly pool, we were working on changing that together with muon to add more sources and filter out transactions..."
"The attacker used some strange way of swapping, I am still looking into that. Basically "faking" a swap of ~2M USDC to 100k DEI, he manipulated the Muon VWAP price with it."
"Then the attacker used a flash loan to manipulate onchain price, as we are checking MUON > OnChain against the other."
"IT WAS NO FLASH LOAN ATTACK. it was something more sophisticated, only possible through abusing the fact that Muon only used ONE DEX as source, in the next upgrade that wouldn't be possible anymore"
"No user lost any money, the loss is on the protocol. Which we will cover through our veDEUS going forward."
"We are working together with Teams from CEXs and other agencies to recover the funds."
"The dev team is working on the DEI situation.
1. User funds are safe. No users were liquidated.
2. DEI lending has been temporarily halted.
3. $DEI peg has been restored."
"Closing in on the hacker @binance has frozen the assets of the suspected hacker's account as the investigation has officially commenced.
An action-fraud case has been opened with England's Cyber Action Fraud Police regarding the recent exploit."
"After scrutiny, the Foundation believes the DEUS Finance Eulogy initiative for restoration and stabilization of the fUSD peg is worth considering. Please vote to either support or oppose this plan."
Further Analysis
Muon was being used to detect SWAPS within a solidly pool, but efforts were underway to enhance it by adding more sources and filtering transactions. The attacker manipulated Muon's VWAP price by falsely swapping ~2 million USDC for 100,000 DEI in an unconventional way. They also employed a flash loan to manipulate on-chain prices, taking advantage of Muon's use of only one DEX as a source. However, it wasn't a typical flash loan attack but something more sophisticated. Fortunately, no users lost money; the protocol absorbed the loss, and it will be covered through veDEUS. Efforts are being made, in collaboration with centralized exchanges and other entities, to recover the funds.
How Could This Have Been Prevented?
More Cryptocurrency Exchange Hacks/Scams/Frauds
Near Protocol Rainbow Bridge First Attack Mitigated > > < < Memeland Memelisted Sale Scammers
Sources/Further Reading
@DeusDao Twitter (Dec 31)
@DeusDao Twitter (Dec 31)
@FantomFDN Twitter (Dec 31)
@lafachief Twitter (Dec 31)
Fantom Transaction Hash (Txhash) Details | FtmScan
(Dec 31)
@DeusDao Twitter (Dec 31)
@DeusDao Twitter (Dec 31)
@0xOtw Twitter (Dec 31)
DEUS Finance AMA with 0xDAO 20 April - YouTube (Dec 31)
@DeusDao Twitter (Dec 31)
Fantom Transaction Hash (Txhash) Details | FtmScan
(Dec 31)
DEUS Finance Exploiter 2 | Address 0x701428525cbac59dae7af833f19d9c3aaa2a37cb | FtmScan
(Dec 31)
 t.me/QuadrigaInitiative
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 /r/QuadrigaInitiative
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 @QuadrigaInit
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 info@quadrigainitiative.com
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