Osmosis Chain Halted After $5M Exchange Exploit

Osmosis hit by a critical exploration

Osmosis, a decentralized exchange, has been used for $5 million.

Initially, the exploit was made possible by a critical bug. DisclosureStraight-Hat3855 is a community member who posted the following message on the Osmosis subreddit. “There is a serious problem with osmosis,” they said, asserting that adding liquidity on the decentralized exchange and instantly withdrawing it was causing users to receive back 50% more tokens than initially deposited. 

After expressing doubt over the user’s claims, other community members began depositing and withdrawing liquidityThe exploit was able to be used as described. According to Osmosis, only about $5 million of the exchange’s $212.77 million in total value locked was drained before the developers halted the like-named blockchain for emergency maintenance.

RoboMcGobo (an Osmosis senior analyst), claims that the pseudonymous RoboMcGobo is the author., the blockchain’s validators were able to respond and coordinate the emergency halt within 12 minutes of the exploit being discovered. If the developers had not halted the chain, malicious users could’ve continued using the exploit to drain the exchange’s entire liquidity.

In update posted to Twitter, the official Osmosis account wrote that the “bug has been identified and a patch written.” “More testing is underway before validators are recommended to coordinate a restart,” the team explained, announcing that a full bug report and action plan would be coming soon. 

Osmosis is a blockchain-based decentralized exchange. It uses the same name as the Blockchain. Cosmos SDK. Osmosis can be interoperable with all Cosmos-based blockchains, just like Secret Network and other Cosmos SDK chain chains. DeFi Llama data indicates that Osmosis is, despite having only one decentralized application in its Cosmos-based blockchain, the second-largest Cosmos based blockchain by total value. 

The OSMO token lost 2.3% in the news, dropping from $1.19 prior to the exploit to $1.06 at press-time.

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