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Spartan Protocol exploit results in loss of M

Spartan Protocol exploit results in loss of $30M

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Source: Coin Telegraph

The price of SPARTA token plunged 30% on Sunday as details of the attack came to light.

Spartan Protocol, a liquidity platform for synthetic assets on the Binance Smart Chain, was drained of $30 million in a coordinated attack on its liquidity pool late Saturday. 

The exploit targeted a “flawed liquidity share calculation” in the SPARTA/WBNB liquidity pool, which enabled the attacker to withdraw the funds, blockchain security company PeckShield explained. The security expert continued:

“In particular, the specific hack inflates the asset balance of the pool before burning the same amount of pool tokens to claim an unnecessarily large amount of underlying assets. The consequence of this attack results in more than $30M loss from the affected pool.”

The nuts and bolts of the attack center around the manipulation of flash loans, which were used to inflate the balance of the pool before burning an equivalent amount of pool tokens.

Spartan Protocol tweeted about the exploit late Saturday, explaining that the “Attacker used $61m in BNB to overcome the pools via […] as yet unknown economic exploit path to remove roughly $30m in funds from the pools.”

Spartan Protocol’s latest update on the matter came early Sunday, where it linked followers to the PeckShield report:

The attack goes down as one of the single largest monetary exploits in DeFi history, according to Rekt. Only five other DeFi exploits resulted in the loss of more funds: EasyFi ($59 million), Uranium Finance ($57.2 million), Kucoin ($45 million), Alpha Finance ($37.5 million) and Meerkat Finance ($32 million).

The value of SPARTA, Spartan Protocol’s native token, plunged 30% on Sunday to $1.17. It was down over 29% in Bitcoin (BTC) comparative and 31.4% versus Ethereum (ETH).

Theft and exploitation are nothing new for the cryptocurrency community. In addition to the recent string of DeFi attacks, crypto criminals stole an estimated $1.9 billion in 2020, according to Finaria, an Italian publication. Fraud was the leading crypto-based crime, followed by theft and ransomware. The year before, in 2019, criminals made off with an estimated $4.5 billion worth of cryptocurrency. 

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Author: Sam Bourgi