DeFi disasters: $31M drained from MonoX and BadgerDAO losses top $120M

December 3, 2021 Coin Telegraph

DeFi disasters: M drained from MonoX and BadgerDAO losses top 0M

A disappointing week of exploits has put a temporary grim cloud over the end of 2021, with BadgerDAO and Huobi-listed MonoX suffering major losses.

More than $150 million has been lost this week in separate security breaches at DeFi projects MonoX and BadgerDAO.

Multi-chain decentralized exchange (DEX) MonoX (MONO) suffered a cyber attack on Nov. 30 leading to about $31 million in losses. BadgerDAO (BADGER) suffered a front-end attack that was discovered on Dec. 2 with estimates of Badger’s losses hitting more than $120 million.

The MonoX DEX platform suffered a single attack on Nov. 30. In this attack, a bug in the smart contract allowed for a discrepancy to exist between prices of assets, when manually changed.

Rekt News explained that hackers were able to inflate the price of MONO via the smart contract, then buy up other assets from the protocol with MONO.

“The hacker created a loop in which the price of tokenOut would overwrite the price of tokenIn, pumping the price of MONO over the course of many 'swaps.'”

The MonoX team confirmed as much in a Nov. 30 tweet. In a postmortem published on Dec. 2, total losses were confirmed at about $31 million. The team added:

"Days like yesterday are horrible, there is no sugar coating the harsh reality of a contract being exploited and people losing money. Our supporters put their faith in a new project like us, and yesterday we let them down."

MONO listed on Huobi only five days before the hack on MonoX.

The Badger security breach was an ongoing threat to users interacting with Badger DAO’s platform rather than a single large exploit.

Discord users began reporting unusual spend requests from the Badger platform and alerted admins on social media and on Discord as early as Nov. 27.

Admin Blackbear responded that the request was unusual, but likely caused by a benign bug in the front-end user interface (UI).

https://twitter.com/0xMoves/status/1466275399944445952

The bug in the UI turned out to be the malicious attacker attempting to steal funds from that user’s withdrawal. The same tactic would be used on random users for days, or even weeks before it was discovered as a security breach.

At time of writing, losses from the Badger attack amounted to over $120 million, including 2078.76 BTC, 30.27 ibBTC, and 151.32 ETH, according to blockchain analytics company PeckShield. The Badger team has been investigating the issue and have paused all smart contracts on the protocol to avoid any further losses.

MonoX Announces Public Mainnet Launch on Ethereum and Polygon

October 20, 2021 The Crypto Briefing

Mono X launches mainnet on Ethereum and Polygon

October 20, 2021 Coin Telegraph

AMM

The platform will offer a suite of four assets on Ethereum, and a further five on Polygon.

Automated market maker (AMM) MonoX has announced the official launch of its mainnet platform, offering investors a full complement of swap and liquidity capabilities on the Ethereum and Polygon blockchain networks.

With the release of this new service, Mono X is aiming to establish a cost-effective and accessible infrastructure for liquidity providers seeking to propel their projects to the market and traders interested in engaging in token swap services.

In the case of traditional decentralized exchanges (DEXes) such as dYdX, it is necessary for projects to provide two tokens to build a liquidity pair, a requirement that increases the capital barrier for entry. With the single-sided liquidity feature, projects only need to stake their native token, which means that they can offer more overall liquidity to the market.

According to the official announcement, the liquidity pools implemented upon launch are as follows: On Ethereum, assets include Ether (ETH), Wrapped Bitcoin (WBTC), USD Coin (USDC) and Tether (USDT), while on Polygon, assets include Polygon (MATIC), WBTC, USDC, USDT and Wrapped Ether (WETH).

Last month, the AMM raised $5 million in capital funding to support the decrease of mandatory capital and liquidity levels for decentralized finance (DeFi) projects offering swap, borrowing and lending derivative services on DEXes.

At the time, the project was still in beta development, but this announcement marks a transition to full-scale implementation in the DeFi space.

MonoX CEO Ruyi Ren told Cointelegraph how MonoX is utilizing single-sided liquidity pool innovation to reduce the barrier-to-entry for new DeFi participants:

"Protocols that use liquidity pairs result in capital requirements to participate in DeFi being high. With our model, all you need to do is deposit your own token to the pool (0 collateral). Project owners can list their tokens without the burden of capital requirements and focus on using funds for building the project instead of providing liquidity."

Related: DeFi liquidity pools, explained

In addition, Ren spoke of the potential impact Value Backed Tokens could have on the wider DeFi ecosystem:

Value Backed Tokens (VBT) are tokens that are already backed by other assets. Financial derivatives, game tokens, NFT shards, DAO tokens, and even some stablecoins all fall into this category. With MonoX, we don’t require extra collateral so once a staked Ether is minted, it can be tradable on MonoX with zero capital requirement.

MonoX raise $5M to launch single-token liquidity pools

September 17, 2021 Coin Telegraph

MonoX raise M to launch single-token liquidity pools

Coin Telegraph

The automated market maker is currently in beta development and set to launch in Q3 2021.

Automated market maker MonoX has today announced a debut capital raise of $5 million from venture firms including the likes of Axia8 Ventures, Animoca Brands, Divergence Ventures, among others.

MonoX will use the funds to support its ambitions in reducing the capital and liquidity prerequisites for decentralized finance (DeFi) projects offering swap, lending, borrowing and derivative capabilities on decentralized exchanges (DEXes).

The protocol will achieve this through the introduction of a single-sided liquidity model. Though not a revolutionary concept for liquidity pools, it will aim to support the DeFi ecosystem’s growth.

In traditional DEXes such as Uniswap, industry projects require two tokens to build a “liquidity pair,” increasing the capital barrier for entry. With the single-sided liquidity model, projects are only required to provide their native token. As such, they can offer more liquidity to the market.

Founder and CEO of MonoX, Ruyi Ren, shared his views on the potential impact of the funding:

“With a lot of innovation in the DeFi space, over-collateralization has become an increasingly big problem. We will use the funding to grow the team, further develop and build our community in new flourishing DeFi ecosystems like Solana.”

Once a DeFi project contributes its native token, the MonoX-backed stablecoin vCASH steps in as the second token to form the liquidity pair. Pegged 1:1 to the U.S. dollar, vCASH aims to reduce trading fees commonly experienced within the transactions of traditional automated market makers (AMM).

MonoX is set to launch its mainnet version on the Ethereum and Polygon blockchains in Q3 2021.

Despite the vast potential of single token liquidity, this is by no means the first application of this kind within in the DeFi space.

This time last year, fellow AMM Bancor launched what it called “liquidity mining 2.0” — a single token liquidity provision designed to overcome the insidious challenges of sustaining liquidity and volume in the DeFi markets.

MonoX

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