Polygon based deFi protocol Safedollar crashes to zero after exploit | Hackers initiated an infinite mint | $250,000 worth of the stablecoin drained from liquidity pools | Developers deny they had no part in exploit and promise to investigate.
In the second major exploit in as many weeks on Polygon as DeFi stablecoin Safedollar crashes to zero as hackers made use of an exploit which allowed them to drain the liquidity pools and creating an infinite minting loop.
SafeDollar launched its Decentralized Exchange Offering on partner exchange PolyDEX just two weeks ago, on June 14. The team announced the attack in the project’s official Telegram channel.
“SafeDollar has been under attack. We have paused activities on SafeDollar and investigating the matter.”SafeDollar Telegram post 28 June 2021
The attack started with a seemingly innocent deposit of $SDO, but the attacker clearly intended to increase the rewards earned by the deposit to a virtually infinite amount, with over 831 quadrillion of the stablecoins being minted, which were later sold to the liquidity pools, leading to the price collapse. The original transaction can be seen here on Polygon Scan here.
And it’s not the first exploit in the Stablecoin’s short history, with the project’s IDO vault being compromised just 8 days ago, with almost $100,000 being drained.
The developers have promised to compensate the liquidity providers who lost money during the exploit, but denied that the attack was an inside job, and have said they will publish a post-mortem report on the hack.
Iron Finance’s price crashed after governance token TITAN was exploited just a couple of weeks ago, leaving investors, including Mark Cuban only able to watch as the price also crashed to just above zero.