- Beanstalk witnessed a massive reserves theft worth over $180 Million.
- The hacker borrowed crypto and deposited it in the project to gain voting rights. And eventually theft the project of its reserves within seconds.
- These instances put the asset class further into skepticism.
Beanstalk (BEAN) cryptocurrency has recently witnessed the theft of its reserves valued at over $180 Million within seconds. This instance happened following an attacker who used borrowed money to accumulate voting rights to take the money away.
Beanstalk claims itself as a decentralized credit-based stablecoin protocol. It facilitates a digital asset, BEAN, which intends to keep its value stable at $1 per coin. It functions as a bank, letting savers deposit the Beans and utilizing their savings to make sure that a single bean’s value stays close to $1.
And hence, others were motivated to deposit their digital assets like Ether into a silo to develop stablecoin’s reserves in turn for the operating rights of the entity. And via this, on Sunday, a vote resulted in Beanstalk’s entire silo, which was worth about $182 Million, being transferred out of the organization.
The hacker is yet to be identified and had borrowed $80 Million in digital assets and deposited it in the project’s silo. Hence, gaining voting rights in exchange so that he could pass any proposal immediately. And with that power, the hacker voted to transfer all his reserves to himself, gave back the voting rights, withdrew their money, and repaid the loan. And the attacker carried out all these activities within seconds.
According to the project’s co-founder, who highlighted his thoughts via discord after the hack, honestly not sure what to type, this project has not had any venture backing; hence it is highly unlikely that there is any bailout coming.
Some Traders Willingly Bought Beans
There was an instant effect on the price of Beans as they broke the peg following the attack. It traded considerably below $1, which is its set stable value. And some traders were even buying the beans with the expectation that some sort of rescue package would arrive. And would rebuild the treasury and restore the peg.
This attack that took place in a blink of an eye has made the folks rethink and question the unregulated nature of cryptocurrencies and the unprotected investors.
But security issues are inevitable, and these hackers will crawl over the space anyway. One thing we can do is identify the threat and eliminate it before the crawler finds it. In short, we have to make a move before the hacker does.
ALSO READ: DeFinance Founder Warns Top Crypto Organisations Of North Korean Hackers
Source: https://www.thecoinrepublic.com/2022/04/19/beanstalk-crypto-asset-undergoes-a-loss-worth-over-180m-in-an-attack/