May 2023 - Deus Finance (DEI Stablecoin) Burn Vulnerability - $6.5m (Global)
"Deus Finance. Universal access to institutional-grade blockchain derivatives. Providing the framework for optimistic on-chain digital derivatives. Capital efficiency, cross-margin between exchanges and market makers, in addition to instant settlement, enables DEUS to offer an unparalleled alternative to TradFi."
"DEUS Finance is building an infrastructure layer for peer-to-peer, on-chain derivatives. DEUS v3 utilizes bilateral agreements, meaning both parties lock collateral into a trade, with every trade isolated, and settlements automated."
"DEUS connects traders and counterparties directly. Instead of the common LP-centric models, where liquidity providers take on the systemic risk, DEUS isolates risk per trade between the two parties. DEUS is currently primarily (majority of the liquidity) on the Fantom network, however, DEUS v3 can and will be deployed on multiple chains."
"The DEUS ecosystem has two tokens, $DEUS and $xDEUS, and an algorithmic stablecoin, $DEI." "Users interacting with this software do so entirely at their own risk"
DEI is "The global settlement currency of DEUS's Decentralized FIX" "Traders using DEI will enjoy better fee structures while trading derivatives on DEUS v3."
"DEI is an fractional reserve stablecoin, forked and inspired by frax.finance and can be used as a unit of account for derivative-based trading on protocols built on the DEUS infrastructure layer. Traders, Protocols and Market Makers utilizing and offering trading via DEUS v3 using $DEI as stablecoin will enjoy better Fee Structures, than when using $USDC."
"DEI has a 100% minting ratio and 9% seignorage. 100% USDC is required to mint $DEI (ie. $1 USDC is required to mint 1 $DEI). On mint, 9% is used to buy back $DEUS and deposited into the DEI redemption contract. On redemption, 9% is transferred out of the redemption contract. This figure adjusts constantly and can be viewed in the minter stats."
"A simple implementation error was introduced into the DEI token contract, in an upgrade last month. The burnFrom function was misconfigured, with the ‘_allowances’ parameters ‘msgSender’ and ‘account’ written into the contract in the wrong order.
This created a public (or pubic, according to Peckshield) burn vulnerability, which an attacker is then able to manipulate and gain control of DEI holders’ approvals and transfer assets directly to their own address.
The mis-ordered parameters allow the attacker to set a large token approval for any DEI holder’s address. Then, by burning 0 tokens from the address, the approval is updated to the attacker’s address, who can drain the holder’s funds."
"According to BlockSec’s MetaSleuth, the losses were approximately $5M on Arbitrum, $1.3M on BSC and $135k on Ethereum." "Token holders lost a total of ~$6.5M on Arbitrum, BSC and Etherum, and the DEI stablecoin depegged over 80%."
"An official update mentions a recovery plan for users who lost out in the exploit, and Deus have reached out to the attacker on-chain.
But given the account was originally funded via Tornado Cash on BSC, it’s not looking good."
"Luckily, the exploit on BSC was frontrun, and an on-chain message to the Deus Deployer shows the intent to return the funds. Other whitehats also sprang into action, and over $600k in USDC has so far been returned to a recovery multisig."
"For all white hackers that were able to rescue funds during the DEI exploit from today 05/05/2023
We are confirming 0x7f5ae1dc8d2b5d599409c57978d21cf596d37996
As a DEUS team owned multisig on Arbitrum. Please get in touch with us if you have not already."
Further Analysis
More Cryptocurrency Exchange Hacks/Scams/Frauds
LW Token Price Manipulation Attack > > < < Level Finance Gets Leveled
Sources/Further Reading
Rekt - Deus DAO - R3KT (Dec 31)
@adamb83024264 Twitter (Dec 31)
@zellic_io Twitter (Dec 31)
@0xProtosec Twitter (Dec 31)
Deus DEI Exploiter | Address 0x189cf534de3097c08b6beaf6eb2b9179dab122d1 | Arbiscan
(Dec 31)
Arbitrum Transaction Hash (Txhash) Details | Arbiscan
(Dec 31)
@MetaSleuth Twitter (Dec 31)
Address 0x5a647e376d3835b8f941c143af3eb3ddf286c474 | BscScan
(Dec 31)
Binance Transaction Hash (Txhash) Details | BscScan
(Dec 31)
Deus DEI Exploiter | Address 0x189cf534de3097c08b6beaf6eb2b9179dab122d1 | Etherscan
(Dec 31)
Ethereum Transaction Hash (Txhash) Details | Etherscan
(Dec 31)
@peckshield Twitter (Dec 31)
@DeusDao Twitter (Dec 31)
@DeusDao Twitter (Dec 31)
@DeusDao Twitter (Dec 31)
@hippo_potato Twitter (Dec 31)
https://www.coingecko.com/en/coins/dei-token (Dec 31)
https://deus.finance/ (Dec 31)
New to DEUS? - DEUS Finance Gitbook (Dec 31)
https://app.dei.finance/dashboard (Dec 31)
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