Image: Beanstalk Farms
Hacking. Disinformation. Surveillance. CYBER is Motherboard's podcast and reporting on the dark underbelly of the internet.
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Because crypto can be so volatile, numerous stablecoin projects have popped up to provide even-keeled refuge for traders in the complex world of decentralized finance, or DeFi. Beanstalk did not seek to back its peg with cash reserves, but rather constructed financial incentives for protocol participants, who loan the platform tokens in return for a yield. The hack has caused the stablecoin Bean to break its $1 peg dramatically, and it currently trades at $.156 according to data from CoinGecko. On Discord, the company shared more details of the hack. “An attacker was able to exploit Beanstalk and transfer all of the assets in the contract to their wallet,” the company wrote.
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“The problem is that their voting system was not well protected against flash-loan attacks,” Be’ery told Motherboard in an online chat. “In theory, you get to vote proportionally to your holdings, assuming the bigger stake you have, you are more concerned about the protocol and take more time to validate the improvement proposal. However, with Flash loans you have an "artificial" stake , because the loans need to be immediately repaid and thus do not represent a genuine interest in the protocol.”Do you have more information about the Beanstalk hack? Or other web3 and crypto hacks? We’d love to hear from you. You can contact Lorenzo Franceschi-Bicchierai securely on Signal at +1 917 257 1382, Wickr/Telegram/Wire @lorenzofb, or email lorenzofb@vice.com
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