Badger DAO, an Ethereum-based decentralized finance protocol that allows users to make money with their Bitcoins, has been hacked. According to reports, a single user lost around $ 50 million in Bitcoin - 897 BTC per quotation today - due to the exploit.
This is according to blockchain security firm PeckShield which noted that the total amount that was drained from the protocol is in the region of $ 100 million. The hack was confirmed by the Badger developers. In a tweet, the team acknowledged that they were aware of the protocol violation and were investigating. They added that they have suspended all smart contracts to prevent further withdrawals.
“Badger has received reports of unauthorized withdrawals of user funds. While Badger's engineers investigate this, all smart contracts have been suspended to prevent further withdrawals. Our investigation is ongoing and we will release more information as soon as possible, ”the tweet said.
Speculation about what happened
According to Coindesk's previous report which placed the amount drained from the protocol at around $ 10 million, users of the protocol first reported experiencing problems on Discord. The exploit is speculated to have been performed on Badger.com, which is its front-end UI, and not in the main protocol contracts.
Users complained that they observed that their wallet providers were requesting a suspicious number of permissions to be granted while they were trying to interact with their Badger stores on the website, according to the report.
Since the news of the hack broke, BADGER, the platform's native token has dropped by around 15,3%, currently trading at around $ 22,73.
Hack DeFi at an all-time high in 2021
The DeFi sector saw significant growth in 2021. Total locked-in value in the sector recently hit an all-time high of $ 276,92 billion. The market currently stands at around $ 275,55 billion.
However, security challenges continue to face decentralized financial protocols and the cryptocurrency industry in general. In 2021, according to the DeFi Cryptosec monitoring tool, there were about 73 DeFi exploit incidents.
The total amount lost is approximately $ 1,5 billion. Ethereum-based platforms also accounted for the largest number of hacks as over 50 of the hacked protocols were on the second largest blockchain. This is not surprising as Ethereum hosts the largest number of DeFi projects on it. Ethereum is followed by Binance smart chain (BSC) which has recorded 20 hacks across its DeFi protocols. The single biggest exploit so far has been that of Poly Network at around $ 602 million.
