A relatively unknown DeFi cross-chain bridging protocol Poly Network announced on August 10 that it has suffered, what is being noted as the largest hack in DeFi history by losing over $600M across three blockchain networks of Ethereum, Polygon and Binance Smart Chain. It has been reported that the Poly Network has lost ~$273M of it’s users funds on Ethereum, ~$253M on Binance Smart Chain and ~85M on Polygon. Though, the losses could be more.
The team is now requesting miners and crypto exchanges to blacklist the funds coming from the addresses mentioned above, but apart from the centralized exchanges and stablecoin protocols, it might be a tough ask as the blockchain miners don’t exactly control the transactions they process later and can’t guarantee that it won’t be confirmed on the blockchain. Poly Network has said that the affected assets include WETH, WBTC, renBTC, USDC, USDT, DAI, UNI, SHIB, FEI etc. It has been reported that the attacker (s) has deposited DAI and USDC to the Curve protocol also – a lending/borrowing yield earning protocol.
Poly Network latest $600M hack is over 10 ten times larger than the last major DeFi hack, which was reported with EasyFi protocol losing over $59M of user funds, Rekt HQ leaderboard shows – a source specializing in reporting hacks on blockchain platforms. It’s surprising because Poly Network isn’t a commonly known name in the DeFi protocols list, but somehow was holding such large amounts of user funds. The exact way in which the attack was executed is unknown for now.
So what’s Poly Network? It appears that a crypto service provide O3 Labs had a partnership with Poly Network to develop liquidity pools for their swap platform O3 Swap, sourcing liquidity from several blockchain networks, precisely why the extent of hack is so large and will be impactful for quite some time to come. It appears that the hacker has been paying bounties also and an ETH address hanashiro.eth received 13.5 ETH from the hacker for tipping about the Tether USDT funds getting blacklisted.
This is a developing story and there are several details, which aren’t known for now. These include the exact nature of the hack, the more precise assessment of how much user funds were stolen and the corrective action in the future. But for now, it’s safe to say that users should be careful before putting their funds into unknown and untested protocols.
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