Chinese DEX Platform DODO Loses $2.1 Million In Latest DeFi Attack
In a tweet published in the early hours of today, DODO decentralized exchange said a number of its liquidity pools were attacked yesterday, March 8, 2021.
DODO’s V2 CrowdPool Funds Stolen
The attacks which drained a reported $2.1 million from the Chinese auto market maker (AMM) wallet saw its v2 crowdpools compromised.
According to a company update, several of its V2 crowdpools were adversely impacted. Listing them, the liquidity provider said its WSZO, WCRES, ETHA, and FUSI pools were the most affected. However, its V1 and non-crowdpool v2 pools were still relatively safe, while its AC pool funds have been fully recovered.
As a further precaution, the company said it was disabling the protocol’s pool creation portal to limit the level of damage to the network. The company went further to reassure users that it was working closely with its security provider to recover lost funds from the affected pools.
Reactions on Twitter trailed the announcement with many predicting that the funds have already been siphoned through privacy networks like Monero.
Rising Spate of Attacks in DeFi
The decentralized finance (DeFi) space has become target practice for cybercriminals since the sector gained mainstream acceptance in 2020. Cyber thieves continue to cash out in the billions, per a report released by data analytics firm Chainalysis. DODO’s attack is just the latest in a long series of thefts that have rocked the DeFi space for some time now.
Saddle Finance, a DeFi protocol, reportedly got hacked by whales arbitrating for profits within a few hours of its launch. The decentralized platform, which is a spin-off from Curve Finance, saw a large amount of its stablecoin sBTC swapped for other digital assets. Many investors reportedly lost a large chunk of their investments.
Another DeFi protocol PAID Network was also attacked in March. 5. The report released by the company on Medium showed that the attacker used a compromised private key to take advantage of the smart contract upgrade.
The attacker reportedly upgraded to a new smart contract protocol which allowed him to burn and re-mint tokens. He then proceeded to mint a mouth-watering 59,471,745.71 PAID tokens and sold them. 2.5 million of the loot was sold on decentralized protocol Uniswap. The attacker also made away with 2 million ETH before the security team noticed the fraudulent activities.
Industry Experts Tout DODO To Bounce Back
The DeFi project which was launched in August 2020 by Diane Dai, Radar Bear and an anonymous development team raised a seed fund of $600K in a round led by Framework Ventures. The protocol also saw investments coming in from prominent crypto-facing companies like Coinbase Ventures, Galaxy Digital, and Alameda Research and is highly regarded in the DeFi community.
Industry experts have expressed their belief that the DEX platform would rise from the ashes. Jerry Zhou, the managing partner at Puzzle Ventures, took to his Twitter account to express support for the embattled DeFi project.
According to Zhou, he understands how investors may feel about the news but he said they should know that nothing is ever perfect. Zhou explained,
“I can understand some investors and crowdpooling projects feel frustrated about DODO, but you should know the road is never smooth. As far as I know, they have made significant progress in recovering the funds. I believe they will show a good result in the end.”